Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Sheffield Gas Bill [Lords].

As amended, considered; to be read the Third time.

Middlesex County Council (General Powers) Bill [Lords] (by Order).

Second Reading deferred till Monday next.

Land Drainage Provisional Order (Louth Drainage District) Bill,

Second Reading deferred till Tomorrow.

Ministry of Health Provisional Order (Bucks Water Board) Bill,

Ministry of Health Provisional Order (Church Stretton) Bill,

Ministry of Health Provisional Order (Cirencester) Bill,

Ministry of Health Provisional Order (Horsforth) Bill,

Ministry of Health Provisional Order (Llandrindod Wells) Bill,

Ministry of Health Provisional Order (Mid-Staffordshire Joint Hospital District) Bill,

Ministry of Health Provisional Order (Rawmarsh) Bill,

Ministry of Health Provisional Order (Wath upon Dearne) Bill,

West Hartlepool Corporation (Trolley Vehicles) Provisional Order Bill,

Read a Second time, and committed.

Oral Answers to Questions — CHINA AND JAPAN.

Mr. Mander: asked the Prime Minister to what extent requests made by China at the League of Nations Council

meeting in May last for an extension of the League Health Services in China to prevent epidemics, for loans and for action to assist China under Articles 11 and 17 of the Covenant, are being carried out?

The Under-Secretary of State for Foreign Affairs (Mr. Butler): The general position as regards assistance to China is as stated in the reply given to my hon. and gallant Friend the Member for the Isle of Wight (Captain P. Macdonald) on 14th June. As regards the last part of the question, the Chinese representative at the League of Nations Council meeting in May last made no demand for action by the League under Articles II and 17 of the Covenant. The Council, however, remains seized of the original appeal of the Chinese Government under Articles 11 and 17 of the Covenant.

Mr. Mander: Is there any question of making arrangements with. China for the consideration of these matters?

Mr. Butler: I am not in a position to make any detailed statement on this subject at present.

Mr. Hannah: asked the Prime Minister whether he is now satisfied that the Japanese assurance that normal conditions would be restored in the collection of Chinese Customs at Shanghai, involving the payment of duty by Japanese importers, at the earliest possible date has been fulfilled?

Mr. Butler: My information is that Customs examiners are now being permitted to function on Japanese controlled wharves as well as other wharves, and that Japanese as well as other nationals are required to pay the Customs duties according to the amended tariff in force at ports under Japanese military occupation.

Oral Answers to Questions — CZECHOSLOVAKIA.

Mr. Mander: asked the Prime Minister whether he will consider the advisability of putting forward proposals to the German and Czechoslovakian Governments which would enable citizens who desire to emigrate to Germany to do so on appropriate terms?

Mr. Butler: No, Sir. I do not consider that such a proposal would serve any useful purpose.

Mr. Mander: If the Sudeten Deutsch think that they would have a much better time in Germany, had they not better go there?

Mr. Butler: I think they had better be asked by the hon. Member himself.

Mr. Mander: I am afraid that that would be mischievous.

Oral Answers to Questions — CALIPHATE.

Mr. Hannah: asked the Prime Minister whether, in view of our ancient friendship with Islam, the Government will help to settle the question of the succession to the Caliphate?

Mr. Butler: The Caliphate is a matter which concerns Moslems, and is one in which His Majesty's Government would not be prepared to intervene.

Mr. Hannah: Would not something of this kind he the best possible answer to Mussolini's "sword of Islam"?

Oral Answers to Questions — GREAT BRITAIN AND MEXICO.

Mr. Arthur Henderson: asked the Prime Minister whether the British representative in Mexico City has now reported to His Majesty's Government; and whether an attempt is to be made to settle the differences between His Majesty's Government and the Mexican Government?

Mr. Butler: Yes, Sir. His Majesty's Government are most anxious to effect a fair and reasonable settlement of their differences with the Mexican Government resulting from the expropriation of the British-controlled oil properties. Unfortunately, however, the attitude of the Mexican Government, culminating in the suspension of diplomatic relations, has so far precluded such a settlement.

Mr. Henderson: Do the Government intend to make contact with the Mexican Government, either directly or indirectly, with a view to securing a settlement?

Mr. Butler: I think we must hope that the Mexican Government will modify their own attitude in the matter.

Oral Answers to Questions — ARMAMENTS LIMITATION.

Mr. A. Henderson: asked the Prime Minister whether he is aware that the

United States Government have expressed their willingness to enter into discussions with a view to securing an effective limitation and reduction of armaments; and whether, for such a purpose, His Majesty's Government will enter into discussion with the United States Government in order that definite action may be taken?

The Prime Minister (Mr. Chamberlain): I presume the hon. Member has in mind Mr. Cordell Hull's recent statement that the United States were prepared to join with other nations in moving resolutely towards bringing about an effective agreement on limitation and progressive reduction of armaments. As I have already said, His Majesty's Government are in full agreement with these sentiments, and they will neglect no suitable opportunity of co-operating with the United States and other Governments to attain these objects.

Mr. Henderson: Is the right hon. Gentleman aware that on Thursday of last week a high official of the State Department at Washington stated that the United States Government was willing to enter into discussions with regard to the possibility of disarmament; and will not His Majesty's Government respond to that invitation?

The Prime Minister: If any invitation is addressed to us by the United States Government, we shall certainly respond to it.

Mr. Leach: Would the Prime Minister tell us what he would regard as a "suitable opportunity"?

Oral Answers to Questions — TURKEY (ARMAMENTS CREDIT).

Mr. C. Wilson: asked the Prime Minister whether he is aware that in the Great War guns manufactured by a British firm and supplied to a foreign Power were used in destroying many British lives; and whether in the agreement regarding an armaments credit for Turkey any guarantee has been obtained which may be relied on to prevent such armaments being used against British subjects?

The Prime Minister: Cases of the kind to which the hon. Member refers have doubtless occurred in the past. On this occasion His Majesty's Government have


not sought or received any formal guarantee, but they would not have undertaken to recommend these credits to Parliament unless they had full confidence in the friendly intentions of the Turkish Republic towards this country.

Oral Answers to Questions — CANTON AND ENDERBURY ISLANDS.

Mr. Roland Robinson: asked the Prime Minister what progress has been made in the negotiations with the United States of America with regard to the islands of Canton and Enderbury in the Southern Pacific Ocean?

Mr. Butler: I would refer my hon. Friend to the answer which I gave him on 26th April, and to which at the moment I have nothing to add.

Mr. Robinson: How long have these negotiations been going on; and when does he expect a solution to be reached?

Mr. Butler: The negotiations have been going on for a considerable time, and I hope an agreement will be reached soon.

Oral Answers to Questions — ANGLO-ITALIAN AGREEMENT.

Mr. A. Henderson: asked the Prime Minister what representations have been received from the Italian Government that the date of the operation of the Anglo-Italian Agreement should be expedited?

The Prime Minister: In the course of the exchange of views which has from time to time taken place between the two Governments, the Italian Government have made plain their desire, in which the British Government fully participate, that the Agreement should be brought into force at the earliest possible moment consistent with the fulfilment of the prerequisite conditions.

Mr. Henderson: In view of the fact that the Italian Government have suspended the discussions they were having with the French Government, will the Prime Minister give an assurance to the House that the Italian Government will not be allowed to drive a wedge between the French and ourselves?

The Prime Minister: I have no reason to suppose that the Italian Government wish to drive a wedge between the French and ourselves.

Mr. Wedgwood Benn: Is it one of the prerequisite conditions that bombing of our ships by Italian aeroplanes shall, cease?

The Prime Minister: The conditions have been made public.

Mr. Benn: No, they have not.

Oral Answers to Questions — SPAIN.

Mr. Day: asked the First Lord of the Admiralty whether any British merchant ships have been taken into port by the British naval authorities for examination under the Merchant Shipping (Carriage of Munitions to Spain) Act since 14th June?

The Parliamentary Secretary to the Admiralty (Mr. Shakespeare): No, Sir.

Mr. Day: Can the Minister give us any information as to how long ago these investigations took place?

Oral Answers to Questions — SIERRA LEONE (EDUCATION ORDINANCE).

Mr. Ridley: asked the Secretary of State for the Colonies whether he will see that the board of education being set up under the recent education ordinance in Sierra Leone will include at least one African?

The Secretary of State for the Colonies (Mr. Malcolm MacDonald): The Board of Education to be set up under the new Ordinance is to include one African ex officio member; four persons nominated by the proprietors of schools, who may be either African or European; one nominee of the Freetown City Council and one nominee of the rural areas, who are likely to be Africans; and also four Africans appointed by the Governor.

Oral Answers to Questions — PALESTINE.

PARTITION.

Mr. Mander: asked the Secretary of State for the Colonies the present position with regard to partition in Palestine, in view of the evidence given by Sir John Shuckburgh, Permanent Under-Secretary for the Colonies, to the Mandates Corn-mission in Geneva, to the effect that the matter is contingent upon the findings of the Technical Commission?

Mr. M. MacDonald: I would refer the hon. Member to the statement which I made on the subject in the course of the Debate on 14th June.

Mr. Mander: Do I understand that it would not be true to say that the question of partition is in any way dependent on the findings of this Technical Commission?

Mr. MacDonald: The commission are inquiring into the question of an equitable and practicable scheme, and, naturally, a certain amount must depend on the findings of the commission.

Mr. Mander: Is it not the case that in principle partition is the definite policy of the Government now?

Mr. MacDonald: Yes, Sir; I withdraw nothing of the statements on that point which have been made from time to time in this House and elsewhere.

Captain Peter Macdonald: asked the Secretary of State for the Colonies when it is anticipated that the Palestine Partition Committee will be able to submit its report; and whether it will be possible to submit any final proposal for the settlement of the Palestine question to the Mandates Commission at Geneva during the current year?

Mr. MacDonald: It is not yet possible to foresee when the Partition Commission will be able to submit their report, or when it will be possible for His Majesty's Government to reach a decision, but my hon. and gallant Friend may rest assured that there will be no avoidable delay.

PATRIARCHATE.

Mr. Hannah: asked the Secretary of State for the Colonies whether he can now make any statement about the Orthodox Patriarchate of Jerusalem?

Mr. M. MacDonald: It is hoped to publish next month the draft of an Ordinance to revise and amend the law relating to the organisation and administration of the Patriarchate.

Oral Answers to Questions — KENYA.

ABYSSINIAN REFUGEES.

Mr. Perkins: asked the Secretary of State for the Colonies whether he is aware that over 6,000 Abyssinians are

now living in Kenya; whether he will consider the possibility of transferring them to the hilly territory in Tanganyika, which is a similar climate to that of Abyssinia; and if he will approach the Emperor with a view to offering him the rule of this territory within the suzerainty of the Empire?

Mr. M. MacDonald: The question whether it would be possible to settle the Abyssinian refugees in the Highlands of Tanganyika has been fully considered, but the conclusion reached was that it would not be practicable. The last part of the question, therefore, does not arise.

Mr. Perkins: Why does my right hon. Friend consider it to be not practicable?

Mr. MacDonald: There are a number of detailed difficulties. Perhaps I might let my hon. Friend have a communication on the matter.

CHILD LABOUR.

Mr. David Adams: asked the Secretary of State for the Colonies whether or not juveniles employed in Kenya come under the penal sanctions of the labour code?

Mr. M. MacDonald: As the law stands at present, juveniles employed on contract in Kenya are subject to the penal sanctions prescribed by the Employment of Servants Ordinance. As I indicated in my reply to a question by the hon. Member for the English Universities (Mr. Harvey) on 20th June, the Governor is appointing a committee to review the question of child labour in Kenya, including the application of penal sanctions for the enforcement of contracts entered into by juveniles.

Mr. Adams: When is the Minister likely to have the report on the subject?

Mr. MacDonald: I think it will be some little time. I am not yet certain of the actual personnel of the committee of inquiry that has been appointed, but I can assure the hon. Member that the inquiry will be pursued as rapidly as possible.

Mr. Adams: asked the Secretary of State for the Colonies what was the nature of the experience referred to amongst the objects and reasons for the Bill lowering the age of child labour in Kenya which convinced the Kenya Government that it


must regulate the employment of juveniles and lower the age to 10 years?

Mr. MacDonald: It is not the case that the age limit at which children can be employed in Kenya has been lowered. The position is that, except for the minimum ages prescribed for certain forms of employment in the Employment of Women, Young Persons and Children Ordinance, 1933 there has not hitherto been any overriding minimum, which has now for the first time been prescribed in the Employment of Servants Ordinance. As regards the remainder of the question, I am informed by the Governor that the statement in the Objects and Reasons, that experience has shown the necessity for further provision to regulate the employment of juveniles, did not relate to any particular experience, but that this was a general statement implying that, in Kenya as elsewhere, control of the employment of juveniles had been found to be advisable.

Lieut.-Colonel Sir William Allen: asked the Secretary of State for the Colonies whether the conditions imposed by various ordinances on the recruitment of children of 10 years in Kenya permit of these children being removed from their parents and employed at a long distance from their homes?

Mr. MacDonald: There is no specific restriction in the law on this point. But no juvenile may be recruited without the consent of his parent or guardian and the certificate of the district officer: and these restrictions are designed, among other things, to safeguard the interests of juveniles in the respect which my hon. and gallant Friend has in mind.

Mr. Herbert Morrison: Does the right hon. Gentleman think it is right and reasonable that children of these tender years should be removed from their parents to go to work in distant parts?

Mr. MacDonald: As I have said, the Governor is appointing a committee of inquiry to go into this very question. Pending the report of the committee, I could not add anything to answers I have given to previous questions.

Mr. Riley: asked the Secretary of State for the Colonies whether he is now in possession of any reports to the inquiry which he was having made regarding the

conditions of employment of children from 10 years upwards in our African Colonies; and will be have copies or summaries of all such reports placed in the Library?

Mr. MacDonald: It will, I expect, be some little time before I receive these reports, especially in the case of Kenya, where, as the hon. Member is aware, the Governor is appointing a committee to review this matter. As regards the last part of the qeustion, I will consider the hon. Member's suggestion when I have received the reports.

Mr. Edmund Harvey: Will the report be laid before this House in any form, or issued as a White Paper?

Mr. MacDonald: I cannot promise that, but I will give the matter consideration when I have received the report.

Mr. Benn: Will the report include an account of the penal sanctions to which these children are subject?

Mr. MacDonald: The committee is inquiring into the question of penal sanctions as well as the question of age limit.

Mr. Benn: That was not quite what I asked. I asked if the report would include a record of the sanctions to which they are at present subject.

Mr. MacDonald: I think that is implied in what I have said.

Mr. Ridley: Could the right hon. Gentleman not express an opinion now, without waiting for the report of the inquiry?

Mr. MacDonald: There would not be much purpose in an inquiry into the facts if I were to prejudice the whole inquiry by making a categorical statement now.

Mr. Riley: asked the Secretary of State for the Colonies whether, where children of 10 years of age and upwards are employed under contract in Kenya, the district officer must in all cases certify such contracts; whether before such contracts are entered into the medical officer of the district must examine the child and certify its physical and mental fitness; and whether the employers of such children are under legal obligation to keep a register of such children where they are employed on the surface of mines or on plantations?

Mr. MacDonald: The answer to the first part of the question is in the affirmative. As regards the second part of the question, it is prescribed that no person shall employ a juvenile in any class of labour for which, in the opinion of a Government medical officer, he is physically unsuitable. As regards the third part of the question, it is prescribed, in the Employment of Women, Young Persons and Children Ordinance, 1933, that the employer shall keep a register of all young persons employed in any industrial undertaking (which includes a mine) the minimum ages for which in Kenya vary from 12 to 16 years according to the nature of the employment. There is no corresponding provision in regard to the employment of children on plantations, except where the employment is of an industrial character.

Mr. Riley: Are the children examined by medical officers of health, who certify their fitness, physical and mental, before they are allowed to be employed?

Mr. MacDonald: The provision of the ordinance is as I have stated. Exactly how it is administered I cannot say; but I am at present in communication with the Governor, and will let the hon. Member have the information as soon as I can.

Mr. Shinwell: Can the right hon. Gentleman justify the exploitation of children at this age?

Mr. MacDonald: Hon. Members are very persistent in trying to get an answer out of me, but I have refused to prejudice the inquiry now being conducted, and I think that is a perfectly proper attitude to take up.

Mr. Leach: Who appoints the medical officers who are quite willing to issue


Total Casualties (Civilian and Police Forces) 1935–37.


—
1935.
1936.
1937


Killed.
Injured.
Killed.
Injured.
Killed.
Injured.


Jamaica*
…
…
…
1
14
—
—
—
7


St. Vincent
…
…
…
6
37
—
—
—
—


St. Kitts
…
…
…
3
9
—
—
—
—


Trinidad
…
…
…
—
—
—
—
14
59


Barbados
…
…
…
—
—
—
—
14
47


Bahamas
…
…
…
—
—
—
—
1
2


* Casualties in the Jamaica disturbances of 1938 total 10 killed and 123 injured; of those injured about 64 were only slightly injured.



certificates for the employment of children at 10 years of age?

Mr. MacDonald: They are appointed in the normal way for the appointment of medical officers in the Colonies. I should have to have notice of the question before giving an exact answer.

Mr. Leach: Had you not better sack them all?

Mr. David Adams: What is the nature of the employment for children at 10 years of age?

Mr. MacDonald: It is really employment in the plantations. I understand that the principal kind of employment is picking foreign bodies off the tea trees. It is all employment of a light kind.

Dr. Edith Summerskill: What is the maximum number of hours that children of 12 can spend underground in the mines?

Mr. MacDonald: I think I am right in saying that the employment of children of 12 underground is entirely prohibited. But perhaps the hon. Member will put the question down.

Mr. R. J. Taylor: What is the age on the surface?

WEST INDIES (LABOUR DISPUTES).

Mr. Ridley: asked the Secretary of State for the Colonies how many persons have been killed or wounded in each of the labour disputes in the West Indies in the last three years?

Mr. M. MacDonald: As the reply is in tabular form, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following is the reply:

TROPICAL DISEASES.

Mr. David Adams: asked the Secretary of State for the Colonies whether he is aware that in the southern United States full-time malaria units, consisting of a physician, an engineer, and an entomologist, are now being added to the staffs of state health departments; and whether parallel steps are being taken in British Colonies in the control of tropical diseases?

Mr. M. MacDonald: Yes, Sir. Similar steps have for some years past been taken in most British Colonies. The need for co-ordinating medical, engineering and entomological advice is fully appreciated.

EAST AFRICA (HIGHER COLLEGE).

Mr. Barr: asked the Secretary of State for the Colonies whether he can make any statement on the detailed proposals for the establishment of a higher college for East Africa; whether the inter-territorial conference called by the Governor of Uganda resulted in any constructive proposals; and whether the Government of Kenya proposes to show its sympathy with the proposed college by making a grant similar to the grants made by the Governments of Uganda and Tanganyika.

Mr. M. MacDonald: I am glad to be able to state that the proposals for the establishment of the higher college have now reached an advanced stage, and the answer to the second part of the question is in the affirmative. I am sending the hon. Member a copy of the report of the Conference. A substantial proportion of the money for the endowment fund has already been promised, and plans for the new college buildings are at present being studied by experts in this country. With regard to the third part of the question, the matter will be considered by the Kenya Legislative Council at its meeting next month.

Oral Answers to Questions — CIVIL AVIATION.

EXPERIMENTAL TRANSATLANTIC FLIGHTS.

Captain P. MacDonald: asked the Secretary of State for Air whether he is now in a position to make any statement with regard to the programme of experimental Transatlantic flights which it is proposed to carry out during the present summer.

The Under-Secretary of State for Air (Captain Harold Balfour): As I informed my hon. Friend the Member for Stour-bridge (Mr. Morgan) on 1st June, it is hoped to carry out experimental Transatlantic flights with the Mayo composite aircraft, with flying boats and with land-planes during the course of the year. The programme is under active consideration with Imperial Airways.

EMPIRE ROUTE (HEAVY-OIL ENGINES).

Mr. Chorlton: asked the Secretary of State for Air what steps are being taken to fit the long-distance Empire machines with heavy-oil engines by reason of the economy in fuel and safety from fire.

Captain Balfour: As my right hon. Friend informed my hon. Friend on 28th May, research is in train and encouraging progress is being made in the development of the heavy-oil compression ignition engine, but the results so far attained show a marked disparity in performance as compared with petrol engines. While there is at present no machine on the Empire route of sufficient range to show economy due to fuel when fitted with compression ignition engines the Air Ministry are exploring, with Imperial Airways, the feasibility of fitting engines of this type to one of their aircraft for experimental purposes.

Mr. Chorlton: How many engines of this kind have the Germans in commercial service?

Captain Balfour: I cannot say.

Mr. Perkins: Will my hon. Friend inquire from the Germans what engines they use in their trans-Atlantic boats?

Captain Balfour: If the hon. Member will put down a question on the subject, I will endeavour to obtain the information.

EMPIRE FLYING-BOAT BASE.

Rear-Admiral Sir Murray Sueter: asked the Secretary of State for Air whether any decision has now been come to with regard to the Langstone Harbour scheme for Empire flying boats; and, if the town council of Portsmouth does not desire to develop an air harbour, will he consider developing with rapidity an alternative site on the South Coast, and so avoid the necessity of a flying boat


having to use a French port, as had to be done recently by a flying boat on her return from India?

Captain Balfour: An examination of the various alternative sites for an Empire flying-boat base is proceeding as rapidly as possible with a view to securing the most adequate facilities to enable day and night regular arrivals and departures to be effected without interruption to air services or interference with shipping traffic.

BRITISH AIRWAYS, LIMITED (LONDON-OSLO SERVICE).

Mr. R. Robinson: asked the Secretary of State for Air whether his Department is negotiating with British Airways, Limited, with a view to their continuing the present London-Copenhagen-Stockholm service to Oslo?

Captain Balfour: Preliminary consultations are proceeding with British Airways on the subject of European Air Services, one of which is a London-Oslo service.

Mr. Robinson: As it is proposed to run a service to Oslo, will the Under-Secretary bear in mind that one is already provided by Allied Airways, and will he also bear in mind the recommendation of the Cadman Report that there shall be only one British service to each centre?

Captain Balfour: Allied Airways run from Newcastle to Stavanger, and the advisability of allowing this service to rank for internal subsidy is at present under consideration with the Treasury.

AIR-LINE BOOKINGS (RAILWAY COMPANIES' BAN).

Mr. R. Robinson: asked the Secretary of State for Air whether the ban on air-line bookings has now been completely removed?

Captain Balfour: As I have already informed the House, the railway companies have intimated their intention to remove the ban on air bookings. The ban has been removed in the case of all internal air lines except in respect of the three services of Channel Air Ferries, Limited, and negotiations are in active progress between the operating company and the railway companies. The ban also applies to the Dublin service of West Coast Air

Services Limited and that case is also under consideration.

Mr. Robinson: Will the Under-Secretary look into the case of the air charter companies; and is he aware that the usual agencies while they book charters for Imperial Airways and its associated companies refuse to take such bookings for smaller companies like British American Air Services Limited?

Captain Balfour: If such services are operated at separate fares so as to require a licence under the new licensing order, they will be in the same position as regards booking facilities as any other licensed service.

Mr. Mander: Is the ban still in operation on bookings for the Irish Free State?

Captain Balfour: For the moment, yes, but negotiations are being pursued actively with a view to its removal.

WORKMEN'S COMPENSATION (ROYAL COMMISSION).

Mr. Ellis Smith: asked the Prime Minister whether he will set up a Royal Commission to investigate the Workmen's Compensation Acts and the effect of accidents and industrial diseases on the lives of the people?

The Prime Minister: The Government have had under careful consideration the question of the action to be taken in regard to workmen's compensation. As the House will recollect, proposals for alterations in the present system—some of them of a far-reaching character—have been debated in this House on several occasions during the last few years, and while there has been great divergence of opinion on the merits of the particular proposals, it has been generally recognised that there is a strong case for review of various provisions of the existing Acts in the light of modern ideas and conditions. The Government have considered the feasibility of themselves formulating proposals on the basis of existing information but they have come to the conclusion, having regard to the magnitude and complexity of the questions at issue, that it would be impossible to frame any satisfactory legislation without an up-to-date inquiry of a formal and comprehensive character. Certain special problems of workmen's compensation have been, or are, the subject of investigation


by Departmental Committees, but since the Holman Gregory Committee reported 18 years ago, there has been no general inquiry into the working of the Acts. The Government have accordingly decided to recommend the appointment of a Royal Commission with wide terms of reference which will enable it to inquire generally in to the working of the present system and give authoritative advice as to any changes which may be desirable. I may add that it is contemplated that the Commission should be empowered to consider, in relation to workmen's compensation, proposals such as have recently been brought forward in this House on several occasions, for modification of the position in regard to the employer's liability at common law.

Mr. T. Smith: Will the Prime Minister see that when this Royal Commission is set up and starts its inquiries, it takes into account the workmen's compensation law in some of our Dominions, which is a long way ahead of anything that we have in this country?

The Prime Minister: I have no doubt that the Royal Commission will have those provisions in front of them.

Mr. Shinwell: As the Royal Commission may take a long time before it publishes a report on this matter, will the Prime Minister consider asking such Commission, when it is set up, to consider the publication of an interim report upon which legislation may be introduced?

The Prime Minister: I will consider that, but I am not sure that the information in our possession would be such as to justify our asking the Commission to do that. I certainly will consider the matter.

Mr. Shinwell: Will the Prime Minister consider asking such a Royal Commission to consider special aspects of the workmen's compensation law?

The Prime Minister: I think it is obvious that, if we set up a Royal Commission, it would not be proper to introduce any legislation which affected the general system until we have had its report. I should not consider, on the other hand, that we should be debarred from introducing legislation dealing with particular aspects of the question in the meantime.

Mr. Robert Gibson: When the Prime Minister says that the position of the employers' liability at common law will also be included in the consideration of the Commission, does he mean by that that the doctrine of common employment will be considered?

The Prime Minister: Yes, Sir.

Mr. E. Smith: When the Prime Minister is considering the personnel of the Royal Commission, will he hear in mind the need for people who have had years of workshop experience being represented on the Commission, and that it should not be outweighed with people of the legal profession?

The Prime Minister: I hope that both employers and employed will be suitably represented on the Commission.

TRADE AND COMMERCE (GOVERNMENT POLICY).

Mr. R. Gibson: asked the Prime Minister whether, in view of the trade figures for the month of May, he will now state the Government's policy to meet the slump in trade?

The Prime Minister: I would refer the hon. and learned Member to the reply which I gave to him on 23rd May last.

Mr. Gibson: Can the right hon. Gentleman say what Departments have officials considering this matter, do those officials have joint meeting, and, if so, when did the last meeting take place on the subject?

The Prime Minister: Certainly the Departments concerned do have representatives considering this matter. I cannot say without notice when the last meeting took place, but they are constantly having the matter under consideration.

Mr. Dalton: Has not the slump become much more severe since the Prime Minister's last statement?

The Prime Minister: I do not accept the suggestion of a slump.

Mr. Mathers: Will the Prime Minister expedite the Government decision upon big projects, such as the Forth Road Bridge, which would have a very considerable effect in preventing a slump in Scotland?

Oral Answers to Questions — ROYAL AIR FORCE.

VOLUNTEER RESERVE (PRINCE ALEXANDER OBOLENSKY).

Mr. R. C. Morrison: asked the Secretary of State for Air whether the public announcement that Prince Alexander Obolensky has been granted a commission in the Royal Air Force Volunteer Reserve indicates that British-born subjects whose fathers are not British are no longer barred from entering the Royal Air Force as cadets?

The Secretary of State for Air (Sir Kingsley Wood): There is no intention of modifying the present regulations under which the parents of candidates for commissions in the Royal Air Force, its reserves and auxiliaries must be British subjects. Under those regulations it is, however, open to the Secretary of State to authorise departure from this rule in suitable cases, and such authority was given in the case referred to.

Lieut.-Colonel Sir A. Lambert Ward: Does not the fact that this gentleman has played rugby football for England indicate that he is tolerably well qualified to have a commission in the Royal Air Force?

Mr. David Grenfell: Can the Minister say how many Russians it is proposed to enrol in the Air Force?

Mr. R. C. Morrison: Will the right hon. Gentleman see that equal consideration is given to other applicants who may not bear distinguished titles?

Sir K. Wood: I will give careful consideration to any case that comes before me, but I ought to say that, in this case, the individual referred to was already a member of an air squadron and his name was put forward by his commanding officer.

MINCHINHAMPTON AERODROME (WORKERS' ACCOMMODATION).

Mr. Perkins: asked the Secretary of State for Air what steps are being taken to provide housing accommodation for the additional workers likely to be employed permanently by the Air Ministry on Minchinhampton aerodrome?

Sir K. Wood: Stroud Rural District Council have already agreed to provide a proportion of the houses required for the additional workers, and I am hopeful

that the outcome of the negotiations at present in progress with the Stroud Urban District Council regarding the provision of the balance of the accommodation will be equally satisfactory.

Mr. Perkins: Do I understand from the reply of my right hon. Friend that it is the intention of the Ministry, wherever possible, to employ its own people?

Sir K. Wood: I shall be obliged to my hon. Friend if he will put the question upon the Paper, as that is a general matter of policy.

SUPPLIES (WEST WALES).

Mr. Hopkin: asked the Secretary of State for Air whether any orders have been placed for shirts, socks, and flannel with firms in West Wales, and if he is satisfied that they are receiving a fair share of the orders for these goods now being placed?

Sir K. Wood: Supplies are purchased on the basis of competitive tendering. There are two Welsh firms on the list for shirts and if the hon. Member will supply me with any names of suitable firms in West Wales I shall be glad to have them considered so far as future orders are concerned.

SEA-BOMBING AREA, ORFORDNESS.

Mr. Ross Taylor: asked the Secretary of State for Air whether, following upon the representations made by the Suffolk and Essex Fishery Board regarding the proposed extension under draft bylaws, prepared by his Department, of the sea-bombing area off Orfordness which will so curtail the fishing grounds off Aldeburgh as to render them all but useless, thus gravely affecting the fishing and other interests of the town, he has made such modification of the draft by-laws as will prevent the interests referred to being entirely sacrificed to those of defence?

Sir K. Wood: The representations referred to are being sympathetically considered in conjunction with the Ministry of Agriculture and Fisheries.

AIRMEN'S CHILDREN (EDUCATION).

Mr. Grant-Ferris: asked the Secretary of State for Air what arrangements are being made at new and isolated stations for the secondary education of airmen's children?

Sir K. Wood: Consideration is now being given to this matter with a view to improving the facilities for school attendance in the circumstances referred to.

Viscountess Astor: Will my right hon. Friend consider camp schools which might be built now, as there would be a great evacuation of children in the case of war, and in the meantime it would help them in regard to their health?

AUXILIARY FORCE.

Mr. Grant-Ferris: asked the Secretary of State for Air the date when the new regulations for the Auxiliary Air Force will come into force?

Sir K. Wood: The new regulations for the Auxiliary Air Force will be brought into force as soon as the necessary administrative arrangements can be completed. It is anticipated that the new scheme of emoluments will in the main be introduced on 1st July next.

Mr. Grant-Ferris: Is my right hon..Friend aware that the whole of the Auxiliary Air Force is extremely grateful to the Air Ministry and would like to place on record their thanks, and also to the late Under-Secretary of State for what he did in furtherance of this work?

BALLOON BARRAGE.

Mr. Dalton: asked the Secretary of State for Air whether he has examined the possibility of placing a balloon barrage along the whole length of the East Coast of this country; and what would be the cost of such a means of defence?

Sir K. Wood: The desirability of extending the balloon barrage is receiving close attention in connection with a general review of methods of defence against air attack. No estimate of the cost of placing a balloon barrage along the whole length of the East Coast of this country is available, and I should add that it is not considered that the siting of a barrage as suggested would be an effective or economical use of this particular method of defence.

Mr. Dalton: Assuming that this method is regarded as effective, is it not essential that mass populations on Tyneside, Teesside and in the Midland towns should be afforded similar protection to that which is afforded to London?

Sir K. Wood: I can well understand that, but I would draw the attention of the hon. Gentleman to the last part of my reply, and perhaps I might be able to indicate to him certain considerations which I have in mind in that connection.

Mr. Dalton: Has not the right hon. Gentleman merely said that the placing of a balloon barrage along the East coast would not be economical, and will he not consider the placing of a barrage around some of these numerous industrial populations?

Sir K. Wood: That is another matter. I am dealing with the suggestion on the Paper as far as the length of the East coast of the country is concerned.

Mr. Simmonds: Is it not the fact that this barrage should be mobile?

Mr. Dalton: asked the Secretary of State for Air whether he has taken any steps to accelerate the completion of the balloon barrage for the defence of London?

Sir K. Wood: All practicable steps are being taken to ensure the completion of the balloon barrage at the earliest possible date. Recruiting is in progress for all four centres to be located in the London sectors, and it is hoped that by September, eight of the 10 squadrons to be formed will be in training.

Mr. Duncan: Can my right hon. Friend say whether there is now sufficient gas-making apparatus for the balloons?

Sir K. Wood: Certain difficulties have arisen, but I am glad to say that they are now being overcome.

Mr. J. J. Davidson: asked the Secretary of State for Air whether the balloon barrage system of defence is to be established in Scotland?

Sir K. Wood: As I have already informed the House, I am giving the question of the extension of the balloon barrage my personal attention, but it is not possible to arrive at any decision until further experience has been gained in the development of a balloon barrage in the London area.

Mr. Davidson: Can the right hon. Gentleman assure Scottish Members that the defence of Scotland in this respect will not depend upon the mobility of the


London balloon barrage system, and can he say whether the Scottish local authorities are being consulted with regard to this form of defence in Scotland? Has the Scottish Office been consulted?

Sir K. Wood: I think we must await further experience as far as barrage in the London area is concerned before we can decide the matter to which the hon. Member refers.

Mr. Davidson: Have any steps been taken to obtain the opinion of the Scottish local authorities, apart from the London barrage?

Sir K. Wood: I do not think so. It is a matter more for technical consideration.

Mr. Duncan: Can the right hon. Gentleman say whether the experiments are proceeding satisfactorily?

Mr. Montague: Has the Minister considered an alternative or additional proposal for a rocket-controlled barrage on the coast?

Sir K. Wood: All these matters will, obviously, have to be considered in the light of what I have said.

AIRCRAFTMAN'S DISMISSAL.

Mr. Sorensen: asked the Secretary of State for Air whether, in view of the recent dismissal of an aircraftman subsequent to his conviction for cruelty to a child, it is the practice always to insist on dismissal in cases of such proven cruelty; whether there are similar cases on record; whether opportunity of reenlistment is given after an appropriate period of expiation; and whether the regulations involving dismissal for proven cases of injurious treatment of children applies also in time of war?

Sir K. Wood: There are no similar cases on record. Any such case, including the re-enlistment aspect if it arose, would be considered on its merits having regard to the best interests of the Royal Air Force and of the man himself. As regards the last part of the question no such regulation exists.

Mr. Sorensen: Does the right hon. Gentleman not agree that while condemning without qualification cases of cruelty to children, it is socially unwise to punish the offender in the way that was done in this case?

BRITISH AIR FORCES.

Mr. Day: asked the Secretary of State for Air the present number of squadrons in the Metropolitan Air Force and those engaged in overseas service; the number of squadrons in the Fleet Air Arm; and whether the formation of the various aircraft is proceeding at a satisfactory rate?

Sir K. Wood: The numbers asked for are as follow: Metropolitan Air Force, 123 squadrons (including one squadron temporarily overseas); overseas, 29 squadrons; Fleet Air Arm, the equivalent of 20 squadrons.

Mr. Day: Are these squadrons operating as complete with pilots and machines?

Sir K. Wood: I have answered the question on the Order Paper and I should require notice of any further point.

METEOROLOGICAL OFFICE.

Mr. Markham: asked the Secretary of State for Air how many meteorological stations in this country now take accurate observations of radiation and humidity; and whether it is proposed to add to them in the near future?

Captain Balfour: As regards solar radiation, continuous records are maintained at Kew, South Kensington and Rothamsted and occasional records at Eskdalemuir. No increase is under consideration. Humidity observations are part of the ordinary routine at all meteorological office stations and it is not intended to increase the number of stations except as part of the expansion of the meteorological service to meet both Service and civil aviation requirements.

Mr. Markham: Does not the Under-Secretary consider it necessary to increase the number of these stations? Is it not necessary that more adequate records should be taken of relative and absolute humidity for other purposes?

Captain Balfour: I will bear in mind the point raised by the hon. Member in consultation with the experts of my Department.

Mr. Markham: asked the Secretary of State for Air whether he is satisfied that the present staff of the Meteorological Office is adequate for its duties; and what


numbers are at present engaged upon weather forecasting?

Captain Balfour: As the result of the expansion of the Royal Air Force and of civil aviation a very large increase in the staff of the Meteorological Office has been called for, and is being met as rapidly as suitable personnel can be recruited and trained. There are at present 87 persons engaged on making day-to-day weather forecasts and 13 under training. These numbers will be increased during the next 12 months.

Mr. Markham: Does the proposed expansion give sufficient time for the senior staff so that they can devote adequate time to their research duties?

Captain Balfour: We recognise that these duties make a heavy strain on the senior members of the meteorological staff, but I am told that the matter can be dealt with adequately without further expansion.

Mr. Markham: Is it not a fact that the senior staff have been for years swamped with routine work and that the present expansion does not give an adequate staff to deal with research problems?

Captain Balfour: The present expansion aims at training other experts for the work in order to reduce the routine work that has to be done by the senior staff.

Mr. Markham: asked the Secretary of State for Air whether he is aware that weather forecasts for a fortnight or longer are now being made both in this country and in Germany and have attained a high percentage of accuracy; and whether he will consider taking steps to ensure that the present forecasts from the Meteorological Office are supplemented by comparable long-distance forecasts?

Captain Balfour: I am aware of the long-range weather forecasts being attempted by various methods in many different countries. These efforts are being carefully studied by the Meteorological Office, but so far none of the methods has attained the accuracy which would justify the issue of such forecasts in this country.

Mr. Markham: Is it not a fact that there is 95 per cent. accuracy of forecast made in this country and published in one of our leading newspapers, and would

it not be advisable that the Meteorological Office should consider alternative methods of its own?

Captain Balfour: Long-range forecasts have been studied for many years in India and Germany where the work has been encouraging, but it is not convincing yet. Long-range forecasts in this country, with our changeable climate would be more difficult than in any other country, and it is best to await the result of investigations which we are now pursuing.

Oral Answers to Questions — TRANSPORT.

RAILWAY SERVICE, EAST LANCASHIRE.

Major Procter: asked the Minister of Transport whether his attention has been drawn to the slow train service between Manchester, Accrington, and Colne; and whether he will consult with the railway company as to the possibility of electrifying this route?

The Minister of Transport (Mr. Burgin): I am informed by the London Midland and Scottish Railway Company that they are introducing improved services on this line in July. The company say that they would not feel justified, in existing circumstances, in incurring the expenditure involved in electrifying this route. I may add that I understand that the whole problem of the transport services in this part of Lancashire is to be the subject of a conference next month between representatives of the local authorities, trading bodies and operators of various forms of internal transport.

Major Procter: What does the right hon. Gentleman mean by "improved"? Does it mean that they can so accelerate this service that they can give a speed of more than 20 miles an hour for this route?

Mr. Burgin: What I mean by improvement is, making it better than the position that exists. I should not like to deal with any particular mileage per hour, without notice. The London Midland and Scottish Railway have said that they propose to introduce an improved service on this section of the line in July next.

BERNERA ISLAND, LEWIS (CAUSEWAY).

Mr. Malcolm MacMillan: asked the Minister of Transport whether he has now


received the recommendations of the County Council of Ross and Cromarty regarding the proposed causeway at Bernera Island, Isle of Lewis; and when the work is likely to begin and the estimated cost?

Mr. Burgin: The position is the same as when I replied to the hon. Member's question on 9th March last. No further application has been received from the county council since that date.

Mr. MacMillan: In view of the inconvenience caused to a population of several hundred people, the inevitable cruelty to stock, the damage to commodities and the general lack of facilities, will the right hon. Gentleman take steps to provide the facilities necessary?

Mr. Burgin: I have pointed out that it is a matter for the county council. I gave the hon. Member that reply when he raised the matter on 9th March. I have no communication from the county council since.

Mr. MacMillan: In view of the failure of the county council to look after the interests of these people, will the right hon. Gentleman take up the matter and do something?

STEAMER SERVICE, STORNOWAY.

Mr. Malcolm MacMillan: asked the Minister of Transport whether he has now considered the further representations made to him regarding the proposed improved and faster, or earlier, steamer service to Stornoway from the mainland; and whether he has any proposals for assisting the town council and others concerned in this direction?

Mr. Burgin: I am in communication with the shipping and railway companies concerned and will inform the hon. Member of the result as soon as possible.

ROAD WORKERS' WAGES.

Mr. Malcolm MacMillan: asked the Minister of Transport whether the fair wages clause operates on all road work financed under the five-year road plan of 100 per cent. grants from the Ministry of Transport to Highland authorities; and what wages are being paid on such works in the Isle of Lewis and on the mainland of the county of Ross and Cromarty, respectively, on these schemes?

Mr. Burgin: Yes, Sir. The fair wages clause is operative. In answer to the second part of the question the minimum hourly rate is 11d. in both cases, but I understand that the majority of men employed on the works in the mainland are, in fact, receiving higher rates.

Mr. MacMillan: Has the right hon. Gentleman received no complaints whatever about low wages being paid on these schemes?

Mr. Burgin: I have no reason to think that the fair wages clause is not being operated.

CHEYNE WALK, CHELSEA.

Mr. Benjamin Smith: asked the Minister of Transport whether, in view of the divergence of opinion concerning the usefulness of the barrier erected at the western end of Cheyne Walk, Chelsea, it is his intention that the various interests concerned should be given the opportunity of expressing their views at a public inquiry?

Mr. Burgin: I have no jurisdiction which would warrant my holding an inquiry into this matter.

Mr. Smith: Is not the right hon. Gentleman aware that this barrier extends for 5o per cent. of the road and surely he has some means of negotiating with the local authority on the matter?

Mr. Burgin: "Local government" means that local authorities have powers in their own areas. This barrier has been erected by the Chelsea Borough Council, and I am afraid it is a matter for them.

Mr. A. V. Alexander: Is it on a main arterial road?

SIGNALLING ARRANGEMENTS, FELLING.

Mr. Dobbie: asked the Minister of Transport whether he is aware that, although there is no apparatus at Felling signal box, on the London and North Eastern Railway, to give the signalmen a visible reminder of the order in which trains are approaching, the train register and signal lads have been withdrawn; and whether, in the interests of safe working, he will press the company to reintroduce both the train register and signal lads in this case?

Mr. Burgin: This matter had already been brought to my attention and the circumstances have been carefully considered. Having regard to the conditions which obtain at Felling in relation to those elsewhere, I do not feel that I should be justified in pressing the railway company to re-introduce the train register and restore the signal lads. The railway company are primarily responsible for safety in operation and for the adequacy of their staff. The company have now had over two years' experience of working at the Felling box without the train register book. No difficulty has been experienced during that period, and in the company's view this has confirmed the opinion that the present staffing arrangements are adequate.

Mr. Dobbie: In view of the concentration of responsibilities forced on the signalman by the withdrawal of the signal lads, and the lack of safety arrangements to guarantee the maximum amount of safety to the general public, will the right hon. Gentleman look further into this matter?

Mr. Burgin: I will certainly keep it closely under review. The question of safety is very prominent in my mind, and also in the minds of the railway management, and I think the attention drawn to this matter by the question should ensure that complete precautions will be taken at this signal box.

TRUNK ROADS (LIGHTING).

Mr. Day: asked the Minister of Transport particulars of the agreements which have been entered into between his Department and the local authorities for the purpose of illuminating main trunk routes and/or roads, as recommended by the departmental committee on street lighting under the provisions of the Trunk Roads Act, 1936?

Mr. Burgin: No agreements have yet been completed but as indicated in the answer which I gave to my hon. and learned Friend the Member for East Leicester (Mr. Lyons) on 19th May, certain proposals are under the consideration of my Department or of the local authorities concerned.

Mr. Day: Will the right hon. Gentleman consider utilising the powers given him by this Act?

SIGN POSTS, SCOTTISH HIGHLANDS.

Sir Malcolm Barclay-Harvey: asked the Minister of Transport whether he will give instructions that on the roads in the Highlands of Scotland, to which he is giving a 100 per cent. grant, posts notifying crossing-places, etc., shall be of wood and not of metal?

Mr. Burgin: I am 10th to specify any particular material without regard to individual circumstances, but if my hon. Friend has special reasons I will be glad to consider them.

BRESSEY REPORT (LAND SPECULATION).

Major Oscar Guest: asked the Minister of Transport whether, in view of the publicity given to road development in the London area since the issue of the Bressey Report, the Government are taking any steps to safeguard against increase in the cost of acquiring land required for new roads?

Mr. Burgin: The responsibility for safeguarding must rest on the highway authorities concerned. They alone have the necessary powers. Expenditure for these purposes, if approved, ranks for grants.

An Hon. Member: Is the right hon. Gentleman aware that there has already been considerable speculation in the neighbourhood of proposed new arterial roads as a result of the publication of this report?

Sir Percy Harris: As the Government have to pay a good percentage of the cost would it not be wise in their own interests to point out to local authorities that they should take into consideration the interests of their localities in view of the activities of these speculators?

Mr. Burgin: Perhaps the question and answer will have a result in that direction. My answer is to point out that the responsibility for safeguarding is a highway authority responsibility.

ROAD ACCIDENTS, NEWCASTLE AND GATESHEAD.

Mr. Denville: asked the Minister of Transport the total number of accidents, fatal and otherwise, within the boundaries of Newcastle-on-Tyne and Gateshead, and the number attributable to non-local vehicles?

Mr. Burgin: The numbers of road accidents involving personal injury in Newcastle-on-Tyne and Gateshead during the year 1937 were:

Fatal accidents
Non-fatal accidents.


Newcastle-on-Tyne
32
931


Gateshead
10
415

No information is available as to the places at which the vehicles involved are kept.

Mr. Denville: Does not this show the desirability of a by-pass being built in this locality?

Mr. Burgin: The question is a statistical one, not a question of policy.

LAND ACQUISITION, CARMARTHEN (COMPENSATION).

Mr. Hopkin: asked the Minister of Transport whether he can now say how the £4,882 compensation for 1.3 acres of land near the Carmarthen Bridge is made up, and whether this sum includes a claim for loss of business as well as the acquisition of land and buildings; whether he is aware that the above sum has not been paid and that in at least six other cases the amounts of compensation save not been agreed; what has been the cause of the delay; and when the whole matter will be settled?

Mr. Burgin: The total of £4,882 represents the compensation payable to seven persons who have or had interests in the land and property; it covers all items including loss of business, although no part is earmarked as being in respect of loss of business. Two of the seven have been paid and the remaining five will be paid as soon as the necessary legal formalities have been concluded. The delay in other cases is due to inability to reach agreement with the owners, and the cases will have to be referred to arbitration.

HOUSE OF COMMONS TERRACE.

Mr. Perkins: asked the First Commissioner of Works whether he will consider raising the level of the Terrace?

The First Commissioner of Works (Sir Philip Sassoon): Yes, Sir; but in view of the heavy cost involved—some £7,000 or £8,000—I propose to defer the work until such time as major repair to the Terrace paving becomes necessary.

Mr. Perkins: Can the First Commissioner tell us when it will be necessary for this work to be done?
Sir P. Sassoon: When the pavement becomes bad enough.

TOWER HILL IMPROVEMENT SCHEME.

Major Carver: asked the First Commissioner of Works whether he is aware that the activities of the Tower Hill improvement scheme have considerably added to the amenities for the general public in the neighbourhood of the Tower of London; and, in view of this, whether he will expedite the suggested alterations to the entrance to the Tower by removing certain old railings and the brick wall near Tower Dock, which block the river view?

Sir P. Sassoon: I can assure the hon. and gallant Member that I fully appreciate the work which is being done in connection with the Tower Hill improvement scheme, and I am giving sympathetic consideration to the possibility of carrying out the alterations to which he refers.

LAND REGISTRATION.

Sir Joseph Leech: asked the Attorney-General whether he is aware that the policy of extending compulsory registration on the sale of land under the Land Registration Act, 1925, is now so operated as to he neglectful of the public interest; and will he authorise and organise compulsory registration in an additional number of populous areas occupied by wage-earning residents outside the home counties without further delay?

The Attorney-General (Sir Donald Somervell): I cannot accept the suggestion that there has been any neglect of the public interest in the proceedings taken under the Land Registration Act, 1925. It is not practicable to make orders in respect of areas which are not defined areas of local government. Generally speaking, the work of extending compulsory registration on sale to further areas is proceeding with all convenient speed.

Sir P. Harris: As the experimental stage has long since passed, and it has been proved that it is of great advantage to the country and to owners of land to


have this registration, why are the Government not utilising the powers to extend the area?

The Attorney-General: The hon. Member knows that there have been extensions, first in the county of Middlesex and one recently in the Provinces. The fact that the experiments have succeeded does not alter the fact that the matter is one of great complexity and highly technical, and one in which it is extremely important that the extensions should not be made except where all the conditions are fulfilled which will enable decisions to be carried out without mistakes being made.

Sir M. Sueter: asked the Attorney-General whether he will arrange for the expansion of the technical staff of His Majesty's Land Registry so that compulsory orders for registration on sale can be extended to areas outside the north and north-east of Middlesex and thereby facilitate conveyancing of property in the expanding suburbs just beyond Middlesex; and what is the difficulty in organising a technical staff for this service to the public?

The Attorney-General: As I have often pointed out in answer to questions in this House, the work of extending the compulsory areas under the Land Registration Act is proceeding with as much expedition as is consistent with proper administration. The areas in respect of which it is now proposed to make orders are in the first place the County Borough of Croydon in the county of Surrey. It is not proposed to make any such order for an area north or north-east of Middlesex until progress has been made in respect of these areas.

SOLICITORS' ACCOUNTS.

Sir M. Sueter: asked the Attorney-General whether in view of the convictions since 1935 in the criminal courts of solicitors for fraudulent conversion of clients' money, he will take steps to require solicitors to deposit in local banks, in the joint names of themselves and of the Public. Trustee, such funds and securities as solicitors deal with for clients, so that valuable property cannot be converted without the cognizance of the Public Trustee?

The Attorney-General: As I stated in reply to the hon. Member for Newcastle

(Sir J. Leech) on 10th June, the question of the steps to be taken in these matters is under consideration by the Law Society, who hope shortly to formulate proposals. I do not think that the suggestion made by my hon. and gallant Friend would be practicable.

Mr. Petherick: Will the Attorney-General encourage the Law Society to take steps at the earliest possible moment to prevent such cases of fraud as have appeared in the newspapers and which cast discredit on an honourable profession through the lapses of a few members?

The Attorney-General: I have stated more than once that the Law Society, with whom I have been in touch have had this matter under active consideration for some months, and they hope to put forward proposals shortly which will commend themselves to the House.

Mr. Alexander: Will these proposals include a guaranteed bond system?

The Attorney-General: I cannot say yet what they will include.

BRITISH BROADCASTING CORPORATION (DIRECTOR-GENERAL).

Mr. Hulbert: asked the Postmaster-General whether he can now announce the name of Sir John Reith's successor as Director-General of the British Broadcasting Corporation?

The Assistant Postmaster-General (Sir Walter Womersley): I understand that the question of the appointment of a Director-General of the British Broadcasting Corporation is under consideration by the governors of the corporation, with whom the appointment rests under Clause 7 of the Royal Charter.

Mr. Hulbert: Can the Assistant Postmaster-General give us any idea when the governors will come to a decision?

Sir W. Womersley: I cannot give any idea.

Captain Arthur Evans: Will the Assistant Postmaster-General ask the governors that in making this appointment they will bear in mind the interests of the Vale of Evesham in this matter?

Mr. De la Bère: Will my hon. Friend impress upin the governors the importance of not appointing a succcessor who will provoke Members of Parliament?

HOUSING (SHOREDITCH).

Mr. Crowder: asked the Minister of Health whether his attention has been called to the cost of erecting a five-storey block of dwellings in the Loanda Street area, Shoreditch, at a cost of £194 per room; what is the annual net deficiency; and what proportion of this will be borne by the State and the ratepayers, respectively?

The Parliamentary Secretary to the Ministry of Health (Mr. Bernays): I am aware of this proposal. The annual deficiency is estimated at £1,303. I understand that the borough council have not yet decided how many of the flats should be used for the abatement of overcrowding, and how much of the deficiency will be borne by the Exchequer will depend on this decision.

Mr. Thurtle: Does not the hon. Gentleman agree that the cost of land in Shore-ditch is very high, and that the Shore-ditch Borough Council is to be commended on the efforts it is making, under great difficulties, to provide housing for the people?

Mr. Bernays: Yes, Sir. I have no reason to suppose that the Borough Council are not making every possible effort.

Sir Joseph Nall: Can my hon. Friend say how much of this cost is due to the site and how much to the construction?

Mr. Bernays: Not without notice.

MILK INDUSTRY (GOVERNMENT PROPOSALS).

Mr. Alexander: asked the Minister of Agriculture whether he is in a position to make a statement with regard to forthcoming milk legislation, having regard to the fact that the provisions of the existing temporary Measures expire on 30th September next?

The Minister of Agriculture (Mr. W. S. Morrison): I regret that owing to the pressure on Parliamentary time it will not now be possible for legislation to give

effect to the Government's proposals contained in the White Paper on Milk Policy issued in July, 1937, to be introduced and considered this Session. The Government hopes, however, to introduce such legislation early next Session and, as an interim Measure, proposes to ask Parliament to pass before the Summer Recess a Bill to extend the chief provisions of the Milk Acts, 1934 to 1937, for a further 12 months until 30th September, 1939, and, as proposed in paragraph 8 of the White Paper, to release the Milk Marketing Boards from liability accruing after 30th September last to repay to the Exchequer the advances made under the Milk Acts in respect of manufacturing milk. An extension of Section II of the 1934 Act will enable Exchequer contributions to be made towards the cost of the schemes referred to in paragraphs 20 and 21 of the White Paper, namely cheap milk for school children and for expectant and nursing mothers and children under school age, and in order to facilitate the development of those schemes the Government proposes to ask Parliament to provide an additional £750,000 instead of the £500,000 hitherto made available annually.

Mr. T. Williams: In view of the great anxiety in the minds of liquid milk consumers owing to the recurring increases in price, cannot the Government expedite their Measure, seeing that there is no chance of any immediate reduction in the price of liquid milk while the distribution is not rationalised?

Mr. Morrison: The Government are anxious to proceed with their main Bill, but the exigencies of Parliamentary time this Session have rendered it impossible to introduce it.

Mr. Leach: Cannot the Government consider having another Session?

Mr. Maxton: Did the Minister say that there is to be an additional £750,000 on top of the existing £500,000?

Mr. Morrison: The figure of £750,000 is the total. There is to be an addition of £250,000 to the £500,000 hitherto made available.

BOATING ACCIDENT, RIVER MERSEY.

Mr. Kirby: asked the President of the Board of Trade whether his attention


has been drawn to a boating accident in the River Mersey, near Widnes, on Sunday last when a man, four boys, and a girl lost their lives by drowning following the capsizing of a small passenger pleasure-boat; and what action is taken by way of inspections, annual or otherwise, to ensure that all passenger-boats used on such tidal rivers are in all respects seaworthy?

The Parliamentary Secretary to the Board of Trade (Mr. Cross): My attention has already been drawn to this regrettable accident and I should like to take this opportunity of expressing my sympathy with the relatives of those who lost their lives. I am making certain inquiries, and I should prefer not to make any statement on the case at present. As regards the latter part of the question, every mechanically propelled passenger vessel plying or proceeding on an excursion and carrying more than 12 passengers is required by the Merchant Shipping Acts to be surveyed once at least in each year and to hold a passenger certificate issued by the Board of Trade. Under the Public Health Acts local authorities have power to license certain pleasure boats let for hire which do not hold a Board of Trade certificate.

Mr. Kirby: Is the hon. Gentleman aware that at the inquest on these persons, which was held yesterday, the jury expressed the opinion that their deaths were very largely due to the absence of regulations in regard to the registration of such boats, and can I be told what steps the Government will take to ensure that these boats are registered?

Mr. Cross: I am making inquiries. I have not yet got full information, and I really cannot make any statement on the point until the information has been obtained.

Mr. Pilkington: Does my hon. Friend know whether this boat in particular was inspected recently, and further can he say when he hopes that these inquiries will be completed?

Mr. Cross: I have no information to the effect that the boat was inspected in the way indicated in my answer. At the same time, it is doubtful whether it is

a boat which should have undergone any inspection.

Mr. Benjamin Smith: Is it not common knowledge to the Department that, in fact, the annual survey does not take place in many of these cases?

Mr. Cross: I cannot say whether this is a boat that should be ranked as a pleasure boat or not.

Mr. Pilkington: Will the results of the inquiry be published?

Mr. Cross: No, I cannot give any undertaking.

Oral Answers to Questions — BILL PRESENTED.

SALMON FISHERIES (SCOTLAND) BILL,

"to regulate the law in regard to salmon fishing in Scotland and for purposes connected therewith," presented by Captain Ramsay; supported by Captain McEwen, Lord William Scott, Sir Edmund Findlay, Sir Archibald Sinclair, Mr. Johnston, and Mr. Neil Maclean; to be read a Second time upon Monday next, and to be printed. [Bill 189.]

BUSINESS OF THE HOUSE.

Attlee: Will the Prime Minister state what business it is proposed to take in the event of the Motion for the suspension of the Eleven o'Clock Rule being carried?

The Prime Minister: We propose to report Progress in Committee on the Finance Bill at about 10 o'clock in order to take the Committee stage of a new Ways and Means Resolution relating to duties on motor cars, etc. We also propose to take the Lords Amendments to the Housing (Rural Workers) Amendment Bill. The Motion for the suspension of the Eleven o'Clock Rule will cover the last two items.

Motion made and Question put,
That the Proceedings on Government Business be exempted, at this day's Sitting. from the provisions of the Standing Oraer (Sittings of the House)."—[The Prime Minister.]

The House divided: Ayes, 246; Noes, 134.

Division No. 242.]
AYES.
[3.47 p.m.


Allen, Col. J. Sandeman (B'knhead)
Errington, E.
O'Neill, Rt. Hon. Sir Hugh


Allen, Lt.-Col. Sir W. J. (Armagh)
Erskine-Hill, A. G.
Palmer, G. E. H.


Amery, Rt. Hon. L. C. M. S.
Evans, Capt. A. (Cardiff, S.)
Perkins, W. R. D.


Anderson, Rt. Hn. Sir J. (Sell Univ's)
Findlay, Sir E.
Peters, Dr. S. J.


Assheton, R.
Fleming, E. L.
Petherick, M.


Astor, Major Hon. J, J. (Dover)
Fox, Sir G. W. G.
Pickthorn, K. W. M.


Astor, Viscountess (Plymouth, Sutton)
Furness, S. N.
Pilkington, R.


Alholl, Duchess of
Fyfe, D. P. M.
Plugge, Capt. L. F.


Baillie, Sir A. W. M.
Gluckstein, L. H.
Ponsonby, Col. C. E.


Baldwin-Webb, Col. J.
Glyn, Major Sir R. G. C.
Porritt, R. W.


Balfour, Capt. H. H. (Isle of Thanet)
Goldie, N. B.
Pownall, Lt.-Col. Sir Assheton


Barclay-Harvey, Sir C. M.
Graham, Captain A. C. (Wirrat)
Procter, Major H. A.


Barrie, Sir C. C.
Grant-Ferris, R.
Radford, E. A.


Beamish, Rear-Admiral T. P. H.
Gretton, Col. Rt. Hon. J.
Raikes, H. V. A. M.


Beauchamp, Sir B. C.
Gridley, Sir A. B.
Ramsay, Captain A. H. M.


Beaumont, Hon. R E. B. (Portsm'h)
Grigg, Sir E. W. M.
Ramsden, Sir E.


Beit, Sir A. L.
Grimston, R. V.
Rankin, Sir R.


Bennett, Sir E. N.
Guest, Hon. I. (Brecon and Radnor)
Rathbone, J. R. (Bedmin)


Bernays, R. H.
Guest, Maj. Hon. O. (C'mb'rw'll, N.W.)
Rawson, Sir Cooper


Birchall, Sir J. D.
Hannah, I. C.
Rayner, Major R. H.


Bird, Sir R. B.
Harbord, A.
Reed, A. C. (Exeter)


Blair, Sir R.
Harvey, T. E. (Eng. Univ's.)
Reed, Sir H. S. (Aylesbury)


Boulton, W. W.
Haslam, Henry (Horncastle)
Reid, Sir D. D. (Down)


Bower, Comdr. R. T.
Haslam, Sir J. (Bolton)
Reid, W. Allan (Derby)


Briscoe, Capt. R. G.
Heilgers, Captain F. F. A.
Rickards, G. W. (Skipton)


Brown, Col. D. C. (Hexham)
Hely-Hutchinson, M. R.
Robinson, J. R. (Blackpool)


Brown, Rt. Hon. E. (Leith)
Heneage, Lieut.-Colonel A. P.
Ross Taylor, W. (Woodbridge)


Brown, Brig.-Ge[...] H. C. (Newbury)
Hepburn, P. G. T. Buchan-
Rowlands, G.


Browne, A. C. (Belfast, W.)
Hepworth, J.
Royds, Admiral Sir P. M. R.


Bull, B. B.
Herbert, Major J A. (Monmouth)
Ruggles-Brise, Colonel Sir E. A.


Bullock, Capt. M.
Higgs, W. F.
Russell, Sir Alexander


Burgin, Rt. Hon. E. L.
Holdsworth, H.
Russell, R. J. (Eddisbury)


Butler, R. A.
Holmes, J. S.
Russell, S. H. M. (Darwen)


Campbell, Sir E. T.
Hope, Captain Hon. A. O. J.
Salmon, Sir I.


Carver, Major W. H.
Horsbrugh, Florence
Sanderson, Sir F. B.


Cayzer, Sir C. W. (City of Chester)
Hudson, Capt. A. U. M. (Hack., N.)
Sassoon, Rt. Hon. Sir P.


Cayzer, Sir H. R. (Portsmouth, S.)
Hudson, Rt. Hon. R. S. (Southport)
Scott, Lord William


Cazalet, Thelma (Islington, E.)
Hulbert, N. J.
Selley, H. R.


Chamberlain, Rt. Hn. N. (Edgb't'n)
Hunloke, H. P.
Shakespeare, G. H.


Channon, H.
Hunter, T.
Shepperson, Sir E. W.


Chapman, A. (Rutherglen)
James, Wing-Commander A. W. H.
Shute, Colonel Sir J. J


Chapman, Sir S. (Edinburgh, S.)
Jarvis, Sir J. J.
Simmonds, O. E.


Chorlton, A. E. L.
Joel, D. J. B.
Simon, Rt. Hon. Sir J. A.


Christie, J. A.
Jones, Sir H. Haydn (Merioneth)
Smiles, Lieut.-Colonel Sir W. D.


Churchill, Rt. Hon. Winston S.
Jones, L. (Swansea W.)
Smith, Bracewell (Dulwich)


Clarke, Colonel R. S. (E. Grinstead)
Keeling, E. H.
Smith, Sir R W. (Aberdeen)


Clarry, Sir Reginald
Kerr, Colonel C. I. (Montrose)
Smithers, Sir W.


Cobb, Captain E. C. (Preston)
Kerr, H. W. (Oldham)
Somervell, Rt. Hon. Sir Donald


Colville, Rt. Hon. John
Kerr, J. Graham (Scottish Univs.)
Southby, Commander Sir A. R. J.


Conant, Captain R, J. E.
Keyes, Admiral of the Fleet Sir R.
Stanley, Rt. Hon. Lord (Fylde)


Cook, Sir T. R. A. M. (Norfolk N.)
Law, Sir A. J. (High Peak)
Stewart, J. Henderson (Fife, E.)


Cooke, J. D. (Hammersmith, S.)
Leech, Sir J. W.
Stourton, Major Hon. J. J.


Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Lees-Jones, J.
Strauss, E. A. (Southwark, N.)


Courthope, Col. Rt. Hon. Sir C. L.
Leighton, Major B. E. P.
Stuart, Hon. J. (Moray and Nairn)


Cox, H. B. [...]evor
Lewis, O.
Sueter, Rear-Admiral Sir M. F.


Crookshank, Capt. H. F. C.
Lindsay, K. M.
Taylor, C. S. (Eastbourne)


Cross, R. H.
Lipson, D. L.
Thomson, Sir J. D. W.


Crossley, A. C.
Lloyd, G. W.
Titchfield, Marquess of


Crowder, J. F. E.
Locker-Lampson, Comdr. O. S.
Tree, A. R L. F.


Cruddas, Col. B.
MacAndrew, Colonel Sir C. G.
Tufnell, Lieut.-Commander R. L.


Culverwell, C. T.
M'Connell, Sir J.
Wakefield, W. W.


Davidson, Viscountess
MacDonald, Rt. Hon. M. (Ross)
Walker-Smith, Sir J.


Davies, Major Sir G. F. (Yeovil)
Macdonald, Capt. P. (Isle of Wight)
Wallace, Capt. Rt. Hon. Euan


Davison, Sir W. H
MeEwen, Capt. J. H. F.
Ward, Lieut.-Col. Sir A. L. (Hull)


Dawson. Sir P.
McKie, J. H.
Ward, Irene M. B. (Wallsend)


De la Bère, R.
Maclay, Hen. J. P.
Wardlaw-Milne, Sir J. S.


Denman, Hon. R. D.
Maitland, A.
Warrender, Sir V.


Denville, Alfred
Makins, Brigadier.General Sir Ernest
Waterhouse, Captain C.


Donner, P. W.
Manningham-Buller. Sir M.
Watt, Major G. S. Harvie


Dorman-Smith, Major Sir R. H.
Markesson, Caot. Rt. Hon. H. D. R.
Whiteley, Major J. P. (Buckingham)


Drewe, C.
Markham, S. F.
Wickham, Lt.-Col. E. T. R.


Duckworth, Arthur (Shrewsbury)
Marsden, Commander A.
Williams, H. G. (Croydon, S.)


Duncan, J. A. L.
Maxwell, Hon. S. A.
Willoughby de Eresby, Lord


Dunglass, Lord
Mayhew, Lt.-Col. J.
Windsor-Clive, Lieut.-Colonel G.


Eckersley, P. T.
Mills, Major J. D. (New Forest)
Winterton, Rt. Hon. Earl


Eden, Rt. Hon. A.
Moore, Lieut.-Col. Sir T. C. R.
Womersley, Sir W. J.


Edmondson, Major Sir J.
Morris-Jones, Sir Henry
Wood, Hon. C. I. C.


Elliot, Rt. Hon. W. E.
Morrison, G. A. (Scottish Univ's.)
Wood, Rt. Hon. Sir Kingsley


Ellis, Sir G.
Morrison, Rt. Hon. W. S. (Cirencester)
Wright, Wing-Commander J. A. C.


Elmley, Viscount
Muirhead, Lt.-Col. A. J.
Young, A. S. L. (Partick)


Emery, J. F.
Nall, Sir J.



Emrys-Evans, P. V.
Neven-Spence, Major B. H H.
TELLERS FOR THE AYES.—


Entwistle, Sir C. F.
Nienlson, Hon. H. G.
Captain Dugdale and Mr.Munro.







NOES


Adams, D. (Consett)
Hall, J. H. (Whitechapel)
Ridley, G.


Adams, D. M. (Poplar, S.)
Hardie, Agnes
Riley, B.


Adamson, W. M.
Harris, Sir P. A.
Rilson, J.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Heyday, A.
Roberts, W. (Cumberland, N.)


Ammon, C. G.
Henderson, A. (Kingswinford)
Robinson, W. A. (St. Helens)


Anderson, F. (Whitehaven)
Henderson, J. (Ardwick)
Rothschild, J. A. de


Attlee, Rt. Hon. C. R.
Henderson, T. (Tradeston)
Salter, Dr. A. (Bermondsey)


Banfield, J. W.
Hills, A. (Pontefract)
Seely, Sir H. M.


Barnes, A. J.
Hopkin, D.
Sexton, T. M.


Barr, J.
Jagger, J.
Shinwell, E.


Batey, J.
Jenkins, A. (Pontypool)
Short, A.


Benn, Rt. Hon. W. W.
Jenkins, Sir W. (Neath)
Silverman, S. S.


Benson, G.
John, W.
Simpson, F. B.


Broad, F. A.
Jones, Morgan (Caerphilly)
Sinclair, Rt. Hon. Sir A. (C'thn's)


Bromfield, W.
Kelly, W. T.
Smith, Ben (Rotherhithe)


Brown, C. (Mansfield)
Kennedy, RI. Hon T.
Smith, E. (Stoke)


Buchanan, G.
Kirby, B. V.
Smith, Rt. Hon. H. B. Lees (K'ly)


Burke, W. A.
Lansbury, Rt. Hon. G.
Smith, T. (Normanton)


Cape, T.
Lathan, G.
Sorensen, R. W.


Cassells, T.
Lawson, J. J.
Stephen, C.


Chater, D.
Leach, W.
Stewart, W. J. (H'ght'n-le-Sp'ng)


Cluse, W. S.
Lee, F.
Stokes, R. R.


Cocks, F. S.
Leonard, W.
Strauss, G. R. (Lambeth, N.)


Cove, W. G.
Leslie, J. R.
Summerskill, Dr. Edith


Crisps, Hon. Sir Stafford
Logan, D. G.
Taylor, R. J. (Morpeth)


Dagger, G
Lunn, W.
Thurtle, E.


Dalton, H.
Macdonald, C. (Ince)
Tinker, J. J.


Davidson, J. J. (Maryhill)
McEntee, V. La T.
Tomlinson, G.


Davies, S. O. (Merthyr)
McGhee, H. G.
Viant, S. P.


Day H.
McGovern, J.
Walkden, A. G.


Dobbie, W.
Maclean, N.
Walker, J.


Dunn, E. (Rother Valley)
MacMillan, M. (Western Isles)
Watkins, F. C.


Ede, J. C.
Mender, G. le M.
Watson, W. McL.


Edwards, A. (Middlesbrough E.)
Maxton, J.
Wedgwood, Rt. Hon. J. C.


Edwards, Sir C. (Bedwellty)
Milner, Major J.
Westwood, J.


Evans, D. O. (Cardigan)
Montague, F.
White, H. Graham


Fletcher, Lt.-Comdr. R. T. H.
Morrison, Rt. Hon. H. (Hackney, S.)
Wilkinson, Ellen


Frankel, D.
Morrison, R. C. (Tottenham, N.)
Williams, D. (Swansea, E.)


Gallacher, W.
Naylor, T. E.
Williams, E. J. (Ogmore)


Gardner, B. W.
Owen, Major G.
Williams, T. (Don Valley)


George, Major G. Lloyd (Pembroke)
Parkinson, J. A.
Wilson, C. H. (Attercliffe)


Gibson, R. (Greenock)
Pearson, A.
Woods, G. S. (Finsbury)


Green, W. H. (Deptford)
Pethick-Lawrence, Rt. Hon. F. W.



Greenwood, Rt. Hon. A.
Poole, C. C.
TELLERS FOR THE NOES.—


Grenfell, D. R.
Price, M. P.
Mr. Mothers and Mr. Groves.


Griffiths, J. (Llanelly)
Richards, R. (Wrexham)

Orders of the Day — FINANCE BILL.

Considered in Committee.

[Captain BOURNE in the Chair.]

CLAUSE 1.—(Increase of Customs Duty on hydrocarbon oils.)

4.20 p.m.

Mr. David Adams: I beg to move, in page r, line 19, to leave out "increased," and to insert "reduced."
Before moving this Amendment, may I ask, Captain Bourne, whether I may be allowed at the same time to deal with my subsequent Amendment, in line 20, to leave out "ninepence," and to insert "sevenpence"?

The Deputy-Chairman: It is obvious that, if the hon. Member's first Amendment were rejected, the second Amendment would no longer be called, but I think it might be for the convenience of the Committee if we took a rather wide discussion on this Amendment, on the understanding that the arguments would not be repeated when I put the Question, "That the Clause stand part of the Bill." I think it would be a pity to narrow the discussion down to this actual Amendment itself.

Mr. Adams: Thank you, Captain Bourne. My hon. Friends and I are taking a step directly in opposition to the views expressed by the Government in the Finance Bill. We challenge, on public grounds, the policy which the Government propose and suggest that, instead of an increase in the Petrol Duty, there should be a diminution of it. We say, not with any desire to obtain anything in the nature of a party advantage, if that were possible, but with a full and proper sense of public obligation in this matter, that we desire a reversal of the Government's policy with regard to taxation of this sort. The taxation upon petrol is higher than ever before. It certainly was in existence before the War, but the Excise Duty was removed in 1919 and the Customs Duty in 1921. There was, therefore, a period at all events, perhaps in better and wiser days, in our judgment, when there was no such taxation. It was revived by the right hon. Member for Epping (Mr. Churchill),

when Chancellor of the Exchequer, as a duty on hydrocarbon oil, and as part of the financial arrangements associated with the derating proposals of the Government, and, as the Committee is probably aware, the duty was twice increased by Mr., later Lord, Snowden, in 1931.
We observe that the policy that is now being pursued is contrary to the declared Government policy as expressed in the Finance Bill itself, because the Government are making an additional allowance, towards the wear and tear of machinery equal to a grant of £3,250,000, the purport of that being that industrial machinery throughout the country should not be weakened or impaired. We agree that that is a sound proposition, if the end sought can be achieved, but in the petrol tax we have a reversion of such an attitude, inasmuch as we declare that this is a serious tax upon industry, that it adds to the cost of motoring in all its aspects, and that so costly is it to-day, with the horse-power tax and other forms of taxation, and particularly petrol charges, that there are many persons who utilise their private motor cars only at week-ends. This is one of the main factors in making motoring a costly pastime, and as a result of that the Government are shutting out from the use of the private motor car a very large proportion of our population; they are virtually shutting out the working classes. I declare that this policy is undoubtedly closing a very vast and hitherto untapped market for British motor cars, and that if we could reach a stage, which we hope to do some day, in which the petrol tax was abolished and in which the horse-power tax went the same way, these two factors themselves would have a very large influence in making motoring available to the masses of the people.
In the United States of America the conditions are deliberately made easy for the motorist by the Government, the maximum tax upon petrol being four cents, or twopence, at any time; and I have occasion personally to know that any suggestion that the tax should be increased or any attempt in the direction of increasing the cost of motoring in that country would be strongly resisted, not only by the Government, but by all responsible people in the United States. The result of that position is that motoring


is looked upon as one of the normal enjoyments, functions, entertainments, and sources of pleasure in the United States. It is interesting to note that Herr Hitler, in a declaration some little time ago, said that the totalitarian State of which he was the head would, in the process of time, be able to bring motoring within the reach of all sections of the German people; and in Russia there is an effective movement taking place for the production of cheap cars, and the preservation of cheapness as affecting motoring will place the Russian people on the whole in a position to enjoy this pastime.
I said that this tax was a contributory factor affecting the export sales of British motor cars. The petrol tax and the horsepower tax have forced upon this country the production of the small car, which is, in my judgment, not comparable in comfort and convenience with the larger models, but the British people are forced, by reason of this taxation, to content themselves with these lesser cars, which are unknown in the United States and unknown in most of our Dominions and Dependencies. I assert that the policy which the Government have pursued has caused a loss to this country, inasmuch as we do not export these small cars. They are quite useless abroad, and, as I say, they are almost unknown in our Dominions and Colonies. A friend of mine who has come from the Sudan tells me that in an outlying area chiefly under British control, where the population is only between 300 and 350, there were 30 motor cars, not one of which was of British origin. The fact that we in this country are largely producing small cars means considerable loss in material, in technical skill and labour as compared with the production of larger cars in the United States. Economists would say as to the incidence of the tax that it is steeply regressive and penalises the poorer motorist out of all proportion to the value of his car. That statement will probably not be controverted because in the "Economist" there was an estimate that for a car costing £200, the average cost of petrol, oil and maintenance would be about 31 per cent. That is a heavier percentage than on a large and more costly car.
I would not be in order in arguing the question of the justice of the tax as between motorist and motorist, but it

seems to me that some case might be presented for a properly graded tax, if the tax must be continued, upon horsepower or other means, so that there should not be this discriminatory tax between motorists which undoubtedly prevails. We have by our policy impaired our export trade, while as a nation we are utilising the small and relatively indifferent car so far as convenience and power are concerned owing to the penalties imposed upon motoring. The industry has been hampered because there is a vast market among the working classes which could have been catered for but for the heavy taxation. The difference in this respect between this country and the United States is not due to any disparity in wage standards, but is due to the fact that motoring in that country has been encouraged as an instrument for enjoyment and for the preservation of the public health. It is encouraged as a deliberate policy so that it shall be within reach of the masses of the people. I admit that in the United States there are greater facilities than we enjoy in accessibility to mountains, forests, lakes and rivers. Many thousands of square miles everywhere are free to the American common people. If we had cheaper motoring within reach of the masses of the people we would have that advantage, together with a larger and more profitable industry, and an industry which was capable of exporting its wares abroad because it would produce a larger type of car. It would also bring within reach of the people the great reservoir of health from which they are admittedly excluded to-day.

4.36 p.m.

Mr. H. G. Williams: Although I find myself in a considerable measure of sympathy with the hon. Member for Consett (Mr. David Adams), I do not propose to follow him into the Lobby if he divides. It is unfortunate that in this country we keep distinct the questions of expenditure and taxation. If we were not spending so much it would not be necessary to raise the tax. I must not develop that argument, but I can, in passing, point out that taxation is the sequel to expenditure. It is only reasonable to point out how oppressively high this particular tax has become. When petrol is landed at our ports it is worth about 3d. per gallon. On that is piled a tax of 9d., equivalent to an ad valorem duty of


300 per cent. The subsequent costs are reasonable. I am not one of those who think that we are charged a high price. The distribution of petrol is remarkably efficient, and petrol is ultimately placed at our disposal efficiently and economically. Nevertheless this tax of 9d. is almost half of the retail price, which would be much higher but for the fortunate fact that the heavy increases of taxation have taken place here during a period when petrol has been in over-supply, and there has been a glut. Largely owing to the lack of prosperity in the United States, the demand for petrol has not grown as was anticipated, and crude petroleum is very cheap. The time may come when it will jump violently and then we shall really feel the burden of this taxation. The Chancellor has been lucky, and possibly he had some anticipatory notice, because since the date on which he imposed the extra penny there has been a fall, so that we are bearing an extra burden of only one halfpenny a gallon as compared with the price before the Budget.
I do not know whether hon. Members realise the magnitude of the total burden of taxation on motor transport in relation to other aspects of the industry. This year the Chancellor is proposing to acquire £94,000,000 by means of the petrol tax and the motor vehicle duties. That is a greater sum than people will pay for all the motor cars they buy this year, so that if the Chancellor abolished the motor vehicle duties and the petrol tax and claimed a tax on each vehicle when it was sold, he would have to impose a tax of 100 per cent., or rather more. I do not know of any industry or occupation, except the consumption of alcoholic liquor, where one is met with such a huge impost before one commences to indulge in one's pastime. As far as I can make out, the total value of motor cars, private and commercial vehicles, manufactured in this country is something under f £100,000,000, and on that we impose taxation of 100 per cent.
I asked a friend of mine engaged in commercial transport for some figures. He told me that the average price of a double-decker bus is £1,730. These vehicles, which are looked after much more carefully than any of us could afford to look after our private cars, have a long life. They average about 35,000

miles a year, and in the case of this company have a life of 250,000 miles, which means about seven years. They do about 7.3 miles to the gallon. Such a bus during its life will use 34,000 gallons of petrol. The tax on that amount is £1,284. The vehicle is taxed at about £70 per year, so that it pays £490 in its seven years' life. Such a vehicle, therefore, will pay during its life in tax on itself and on the fuel consumed £1,774, or £44 more than its original cost. I wonder what our friends the railway companies would say if, whenever, they built a locomotive, they had to hand over to the Chancellor a sum equal to the capital cost of it before they could run it. The railway interests might reply that they had to provide their own tracks. It is rather interesting to make a comparison with the motorist.

The Deputy-Chairman: The hon. Gentleman is getting rather far from the subject of hydrocarbon oils.

Mr. Williams: I agree, but I was trying to deal with the grievance which the motorist has. I remember seeing with some amusement in 1928 a poster in which the motorists were urged to vote for a tax on petrol. The poster was issued by the Automobile Association and urged a tax on petrol and not a tax on the vehicle. I was a junior Minister at the time and knew what was happening, and I could not help laughing because I knew the motorists were going to have the tax on petrol without the consolation of the vehicle duty being taken away. The petrol tax has never been hypothecated. It was restored by the right hon. Gentleman the Member for Epping (Mr. Churchill) for the purpose of financing the de-rating of industrial hereditaments and agricultural land. The motor vehicle duty was hypothecated for a time in the Road Fund, but the same right hon. Gentleman diverted part of it, and ultimately the whole of it was diverted, I think rightly. It is wrong to have a tax hypothecated.

The Deputy-Chairman: The hon. Gentleman cannot pursue that point.

Mr. Williams: I was about to relate the taxation on petrol to the large burden which is cast on the motoring industry. I agree that the line I was developing would be more appropriate on Second Reading, and I will not pursue it because I am reluctant to trespass on the


Rules of Order. This burden, now approaching £60,000,000 a year, is a very heavy one. Hon. Members who drive cars and keep a record of their petrol consumption will be amazed to find what a large proportion of the cost of running a motor car is the cost of petrol. The hon. Member for Consett was, I think, correct when he said that the high cost of petrol prevents a large number of people of moderate incomes from indulging in what he called the pastime of motoring. Most people are not perturbed at the cost of buying a car, because a second-hand car can be bought very cheaply; what worries them is the cost of operation, and in that cost the tax on petrol is a very large item.
I am saying this not for the purpose of voting against the Chancellor, because he has to balance his Budget. The time to deal with the situation is earlier in the Session, when we vote for Bills which impose new burdens. My remarks are not made in the hope of persuading the Chancellor to make any change, because I know that he cannot, but it is only right that he should realise that this new impost has given rise to a great deal of indignation. In common with other hon. Members I have received a great many communications from quite sober-minded people protesting against the height to which this tax has now risen, and only by giving utterance to our views on the subject plainly this year can we hope that the Chancellor will pursue such a course that when he introduces his Budget next year he will not put a further burden upon this essential commodity in modern civilisation. It is in that sense, and not in any other sense, that I have sought to occupy the attention of the Committee, and I am sorry that inadvertently, in seeking to give illustrations of the nature of the burden, I should have wandered from the strict lines of Order.

4.48 p.m.

Mr. Holdsworth: It is always interesting to listen to the hon. Member for South Croydon (Mr. H. G. Williams), and I agree with everything he said this afternoon except his statement that the Chancellor was "bound to balance his Budget." In the normal way he ought to do so, but no one can say that this is a balanced Budget. However, I cannot pursue that point, and I am not

criticising the Chancellor on that ground. It is difficult to say anything new about this tax. Every year for seven years I have spoken on the Petrol Duty, and when we were considering the Ways and Means Resolutions I dealt with its history and shall not go over that ground again. To-day I want to deal with its effect upon transport in general, because I sometimes wonder whether we realise what a tremendous part the cost of transport plays in the costs of production. "Modern Transport," in an interesting article on 22nd January, stated that we spent £614,000,000 a year upon transport of all kinds in this country. It is the most important single industry in the country regarded from the point of view of expenditure. On passenger-carrying vehicles using petrol there is an expenditure of £233,000,000, and on goods vehicles using petrol of £155,000,000, making a total of £388,000,000 on petrol-driven vehicles.
The Petrol Duty is not a tax on a luxury article. I believe the time has gone by when it can be said to be a luxury for a man to possess a motor car. In an age of speed, in which it is necessary to save time, a man has to have this means of transportation if he is to run his business efficiently. Motor transport for the carriage of goods is growing day by day. The penny increase in the Petrol Duty will mean an additional expenditure of £2 or £3 a year for private car owners using their cars to a moderate extent, and it will mean a new burden of £6,000,000 a year on petrol-driven vehicles. I had the running costs of a 10-ton lorry worked out, and found that, including depreciation, maintenance, and garage, 20 per cent. of the costs was due to taxation, and on a 6-ton lorry at least 15 per cent. A 10-ton lorry doing 40,000 miles a year pays £450 a year in taxation. A 6-ton lorry, running eight miles to the gallon, will pay in Petrol Duty this year £187 10s., and a licence duty of £70. The increase in the taxation on the petrol for that vehicle this year will be £21. Taking the taxation on petrol and the vehicle tax together, the taxation is 1½d. per mile for every mile that vehicle runs. In the case of a 10-ton lorry doing five miles to the gallon the taxation upon the petrol consumed this year will be £300 and there will be a vehicle tax of £150. The increased tax on petrol on that particular


vehicle this year is£34. The total of taxation on that vehicle is 2d. for every mile run. In addition to that it pays the A licence duty, and there is the tax on the oil it consumes.
The hon. Member for South Croydon gave figures of the total taxation which the motorist has to pay. The vehicle duty will yield £36,000,000 and the petrol duty £57,500,000, but in order to be fair we must knock £6,000,000 off the £57,500,000 for petrol used for other than transport. If that is done the total taxation which road transport will have to bear this year is £87,500,000. I cannot follow this point too far, but it is interesting to note that the total expenditure upon roads this year, according to information given to me in answer to a question in this House, will be £58,000,000, against a total of £87,500,000 raised from the taxation upon road vehicles.
I have one point to make about the tremendous burden of this duty upon industry. I have received a communication from the cotton industry, and I am told by the statistician to that industry that 73 per cent. of the raw cotton used in Lancashire is carried by road and that 8 per cent. of cotton yarns and cotton cloth is transported by road. No industry in this country has had a bigger struggle for existence during the past few years than the cotton textile industry. There is urgent necessity to increase our export trade, not only in cotton goods but in all textiles. Anyone with experience of the cotton industry or the wool and worsted textile industry knows that since the War margins of profit have got less and less. There is tremendous competition, and I believe it is true, though I am open to correction on this point that quotations for cotton cloths are worked out to one-sixty-fourth of a penny per yard. That shows the severe competition there is, and the tremendous effort which has to be made by those in the industry in order to keep the export trade going.
Do we realise how much transport enters into the cost of all manufactured articles? The raw cotton has to be transported to the yarn spinner, then from the yarn spinner to the weaver, from the weaver to the bleacher, and from the bleacher to the finisher. At every stage in manufacture the cost of transport is adding to the cost of the finished article. I recognise that the Chancellor of the

Exchequer has to raise money. I am one of those who voted for every increase in armaments, because I thought they were necessary, and having done so I feel that it is my duty to assist in finding the money, but I would suggest to the Chancellor that taxation should not be put upon an industry before profits are made. In this case it is a running cost. This Petrol Duty adds not only to the costs of the transport industry itself but to the costs of every other industry in the country.
I would like to repeat a point which I made on 3rd May, when I pointed out that 87 per cent. of the total increase in national expenditure between 1930–31 and 1937–38 has been found by the motor industry. I gave further particulars in that speech, and they have been refuted, so I take it they are true. It is a striking thing that this new industry, as it might be called, which is assisting all the industries of the country in the speeding up of manufacture, making it possible for them to carry less stock—because it has enabled that to be done—and assisting deliveries from door to door, should be the industry among all others which is chosen to bear this tremendous burden. I can only think that the Chancellor, when going through things which might be taxed in order to find a way of balancing the Budget—using that word in the Budget sense—decided that this was the easiest form of taxation to collect, but it is not merely a question of how easy a tax is to collect, the effect upon industry in general has to be considered. Although I have little hope of persuading either the Chancellor or the Financial Secretary to the Treasury to give way upon this particular Amendment, I hope that as soon as there is an opportunity of decreasing the taxation upon the motor industry that step will be taken. I remember reading Lord Snowden's second Budget Speech in 1931, in which he regretted having to put another 2d. upon petrol. Since that date the Petrol Duty, which was then raised to 4d., has had another 5d. added to it, making it 9d., and I trust that clue consideration will be given to this point in some future year when there is an opportunity of relieving what is really a grievous burden.

5.0 p.m.

Colonel Sandeman Allen: I would delay the Committee for a few moments to


emphasise more or less what the hon. Member for South Bradford (Mr. Holds-worth) has just said. I hope that the Chancellor may be able to see an opportunity in future to reduce this duty, if he is unable to do so now. It is said in this country that we have solved the problems of production and consumption but not the problem of distribution; I cannot see that we are ever going to solve that problem if we continue to increase the taxes upon distribution. I agree that the amount which is paid by way of the Petrol Duty is more than sufficient to cover the cost of the roads. There is sufficient surplus to pay for the derating of the railways and to allow the railways to run their engines on untaxed oil. That does not take into consideration in any way the fact that the motor industry is also being taxed on income and on the profit that it makes. We tax it on its fuels, and on its existence by licence duties, and there is also the Income Tax on profits which may be made after the Chancellor of the Exchequer has raked off everything he possibly can. I hope that the Committee will bear in mind the point I have made, that I can see no solution of the problem of distribution along these lines and that the solution goes further away as taxes are increased upon the methods of distribution.

5.2 p.m.

Mr. Herbert Morrison: I regret that the hon. Member for South Croydon (Mr. H. G. Williams) will not be able to support us in the Division Lobby on this Amendment. He takes the view that if the Budget is to be balanced the money must be found. The hon. Member for South Bradford (Mr. Holdsworth) made the point that the Budget is not balanced; in any case, this is not the only way in which the money could be found. If the Amendment were carried it would mean that the Chancellor of the Exchequer would have to reduce his expenditure or find some other sources of revenue. The fate of this Clause does not so conclusively determine the balance between the expenditure and the income of the Budget.
This tax was started with a note of apology by the right hon. Gentleman the Member for Epping (Mr. Churchill) some years ago, and with a touch of humour, as has been indicated. He made a joke

about the motorists' claim that taxation should be on petrol, and he said: "All right, I will give you a tax on petrol," but he did not do anything about the other side of the matter. I very well remember Lord Snowden's profound regret that he had to make this tax which, in his view, was burdensome upon industry and enterprise. During the years, there has been a very great increase in the tax until it has now reached a high proportion of the capital costs and running costs of motor transport, particulars of which have been given by the hon. Members for South Croydon and South Bradford. The tax was justified at one time on the ground that the price of petrol had fallen and the additional taxation would therefore not be felt, but since that time there have been changes in the price-level of petrol, and on the whole the price is higher now than at that time. Consequently, the argument is by no means as true as it was.
This tax involves, as my hon. Friend the Member for Consett (Mr. D. Adams) said, a severe tax upon private-car traffic and is particularly burdensome on the user of the small car. In relation to private-car traffic I admit that the argument that there is some element of luxury taxation cannot be ignored but, on the other hand, to many people in business the private car is important as an ancillary to the business, and the tax may damage them in that way. It constitutes a serious burden to the person of limited means running a small car, but it is an enormous burden to commercial traffic and goods transport and is being protested against year by year by people interested in those industries. I have had a considerable number of letters on the subject, as doubtless other hon. Members also have. If we add to the petrol-consumption tax the road-vehicle duty, as to which I am not complaining because it is used for a particular purpose, the overall taxation upon commercial motor transport is very serious.
The same is true of road passenger transport, which already bears a substantial vehicle duty, as to which I do not complain. That tax was considered to be appropriate in the case of road passenger transport vehicles to enable them to earn their keep, but the Petrol Duty has no relationship to road maintenance in any sense of the term. It is a general tax upon a particular type of industry,


which is already taxed far beyond the actual cost of the petrol consumed. That is an unusual feature which up till now was limited, I think, to intoxicating liquor. This tax has now reached a point where it is beyond the original cost of the petrol, and where the people in the industry and the community generally are entitled to protest.
I have the figures to show what the tax means to a great public undertaking like the London Passenger Transport Board. Parliament has set up that great public authority, given it responsibilities and directed it to pay certain rates of interest upon the various classes of stock, but by this steadily rising Petrol Duty Parliament is making it exceedingly difficult for that public authority to carry out its responsibilities. It is not fair that Parliament should do so. This authority is paying very substantially in taxation in one way or another, but the money it pays in Petrol Duty is much bigger than any other taxation it pays into the public funds.
In the year ended 30th June, 1937, the London Passenger Transport Board paid £742,617 in respect of local rates, railway freight rebates fund, land tax and tithe-rent charge. It paid, in respect of licensed vehicles duty, licence fees and road service licences, that is to say, taxation in relation to its function as a public service vehicle owner on the roads, £603,005. The duties upon petrol and other fuel, which we are discussing and which have no relationship whatever to the damage done by the vehicles of the board to the roads, and no relationship to those vehicles paying for their keep upon the road, which should be their legitimate contribution to the permanent way—an imperfect analogy to the permanent way of the railway companies—amounted to £1,422,782. As I have said, the tax which the board pays in relation to its function as a road-service undertaking, for running along the streets and getting the advantage of traffic signals, highway improvements, road maintenance, and so on, was £603,005. The additional 1d. upon the petrol tax will involve the board in an extra cost of about £180,000 in the coming year, bringing the total taxation in respect of petrol and other fuel into the region of £1,600,000.
That is a terrific tax to put upon a public authority of this kind which has important functions to fulfil, arid if it goes on for long enough it will force the Board

to reconsider the level of fares. It is quite speculative as to whether that would bring in more money and there would be a great public outcry about it. I urge upon the Chancellor of the Exchequer that it is time to leave off shedding tears and apologising about this tax, and time to do something about it. Chancellor after Chancellor has expressed regret at having to impose the tax, and the original Chancellor of the Exchequer who put it on apologised for it. This is a tax upon industry and transport, and it is therefore burdensome indirectly upon industry as a whole.

5.13 p.m.

The Financial Secretary to the Treasury (Captain Euan Wallace): The hon. Member for South Bradford (Mr. Holdsworth) began a speech containing some interesting figures, which I look forward to seeing on paper, by saying that there was nothing new to be said about the Petrol Tax; and I think the Committee will appreciate that on the broad principle of the tax and on the necessity of imposing the addition there is not very much that I could say which the Committee has not already heard on one or two occasions already. I wish, therefore, to devote my remarks for a few moments to the points raised by hon. Members in all parts of the Committee in the four or five verymuch-to-the-point speeches.
The hon. Member for Consett (Mr. D. Adams), who moved the Amendment, devoted his speech to the effect of the petrol tax and therefore, a fortiori, of the increase in the tax, upon the small motorist. He went so far as to say that it was really shutting the working classes out of the pleasures of motoring—if indeed it is very much of a pleasure to motor at the week-end in present conditions. I think the real answer to his contention lies in the figures which the Chancellor of the Exchequer gave during the Debate on the Second Reading of the Bill, when he pointed out that cars which are taxed by horsepower—that is, excluding commercial goods and commercial passenger vehicles—increased from 1,308,000 in 1934 to 1,798,000 in 1937. I do not think there is any reason to anticipate that the steady increase in these numbers is going to stop. It is true, as any hon. Member can discover by comparing the rate of tax on petrol and the number of vehicles licensed in any year, that the duty on petrol has not had any appreciable effect


in preventing expansion in the use either of private cars or of lorries and other vehicles.
The second point made by the Mover of the Amendment was that the policy of a high petrol tax had forced manufacturers in this country to flood the market with small cars—

Mr. David Adams: With other taxation.

Captain Wallace: —and had therefore prevented the motor manufacturers in this country from developing an engine which would be suitable for export. It is a very interesting fact, to which reference has already been made this afternoon, that in 1928 exactly the reverse argument was put to the Government by the motor organisations. They suggested that the one bar to a rapid development of the kind of car which would sell well abroad was the horsepower tax, and at that time they took the view, rightly or wrongly, that it would be better to have the whole of the tax on petrol.
When the hon. Member was talking about the hardship on the small motorist, I tried, with the help of a colleague beside me who is good at arithmetic, to work out exactly what this additional penny would mean to the small man who uses his car, as many do, just at the week-end. If he had a car which was capable of doing 30 miles on a gallon of petrol—and I believe there are a number of cars which can do that—he would be able to get in a week-end run of 360 miles for another is., or, say, a year's motoring of well over 7,000 miles for an extra £1. Much, therefore, as I sympathise, and as I think the Chancellor sympathises, with such people in having any additional impost placed upon them, I do not think the Committee will take the view that this extra tax is what might be called harsh or unconscionable.

Mr. H. G. Williams: My right hon. and gallant Friend speaks of is. per week-end and £1 per year. Do I understand that he is calculating on the basis of there being only 20 week-ends in the year?

Captain Wallace: As a matter of fact, a great many people do not get as many as 20 motoring week-ends in the year. My hon. Friend the Member for South Croydon (Mr. H. G. Williams) dilated with all his usual accuracy, supported with all his usual statistical armoury, on the

hardships, first on the motorist and, secondly, on the transport industry, but he was kind enough to give, at the very opening of his remarks, the answer to the whole of his own speech when he said that of course this is a revenue tax, and the money has to be raised somehow. Evidently he did not see any better way of raising it.
The hon. Member for South Bradford gave, as I have said, a number of extremely interesting statistics in regard to the cost of fuel in the working life of commercial vehicles. I would not for an instant attempt to criticise those figures, but the hon. Member made one extremely far-reaching remark when he suggested that we should adopt the principle that there should be no taxation before profits are earned. That might be all very well for a Government of the complexion of the present Government, but, if hon. Gentlemen opposite were to get into office, and were able to adopt their full-blooded policy of socialising the whole of industry, it is difficult to see where the profits would come in on which the tax was to be collected, and I am afraid we should come down to getting the whole of the money from the millionaire, who would very shortly cease to exist.
The right hon. Gentleman who has just spoken made it clear that Mr. Snowden, when imposing the last increase upon these hydrocarbon oils, which raised the tax from 6d. to 8d., did so with very great regret, and he reminded us that in 1928 my right hon. Friend the Member for Epping (Mr. Churchill), when he was Chancellor of the Exchequer and inaugurated this tax for a particular purpose, also did so with regret. The present Chancellor of the Exchequer authorises me to say that he is following in their footsteps. [Interruption.] At any rate, whatever his personal feelings are at the moment, I do not think they are so strong as to induce him to authorise me to accept this Amendment. Although I might go on for a long time descanting to the Committee on the amount of revenue that has to be obtained, the total consumption of petrol, and so on, the issues are perfectly plain, and I will only conclude by saying that, if there is a case for keeping this Clause in the Finance Bill, as I firmly believe there is, that case is, of course, doubly strong against the proposal made in the Amendmer we are discussing, to reduce the tax ins of increasing it.

Question put, "That the word increased' stand part of the Clause.

The Committee divided: Ayes, 219; Noes, 145.

Division No. 243.]
AYES
[5.24 p.m.


Agnew, Lieut.-Comdr. P. G.
Gledhill, G.
Pownall, LI.-Col. Sir Assheton


Allen, Col. J. Sandeman (B'knhead)
Glyn, Major Sir R. G. C.
Procter, Major H. A.


Allen, Lt.-Col. Sir W. J. (Armagh)
Goldie, N. B.
Radford, E. A.


Amery, Rt. Hon. L. C. M. S.
Gower, Sir R. V.
Raikes, H. V. A. M.


Assheton, R.
Graham, Captain A. C. (Wirral)
Ramsden, Sir E.


Astor, Major Hon. J. J. (Dover)
Grant-Ferris, R.
Rankin, Sir R.


Astor, Viscountess (Plymouth, Sutton)
Gretton, Col. Rt. Hon. J.
Rathbone, J. R. (Bodmin)


Atholl, Duchess of
Gridley, Sir A. B.
Rawson, Sir Cooper


Baillie, Sir A. W. M.
Grimston, R. V.
Rayner, Major R. H.


Balfour, Capt. H. H. (Isle of Thanet)
Guest, Hon. I. (Brecon and Radnor)
Reed, A. C. (Exeter)


Baxter, A. Beverley
Guest, Maj. Hon. O. (C'mb'rw'lt, N.W.)
Reed, Sir H. S. (Aylesbury)


Beamish, Rear-Admiral T. P. H.
Hannah, I. C.
Reid, Sir D. D. (Down)


Beauchamp, Sir B. C.
Harbord, A.
Reid, W. Allan (Derby)


Beaumont, Hon. R. E. B. (Portsm'h)
Haslam, Henry (Horncastle)
Rickards, G. W. (Skipton)


Birchall, Sir J. D.
Heilgers, Captain F. F. A.
Ropner, Colonel L.


Bird, Sir R. B.
Hely-Hutchinson, M. R.
Ross Taylor, W. (Woodbridge)


Blair, Sir R.
Heneage, Lieut.-Colonel A. P.
Rowlands, G.


Boulton, W. W.
Hepburn, P. G. T. Buchan-
Royds, Admiral Sir P. M. R.


Bower, Comdr. R. T.
Hepworth, J.
Ruggles-Brise, Colonel Sir E. A.


Briscoe, Capt. R. G.
Higgs, W. F.
Russell, Sir Alexander


Brown, Col. D. C. (Hexham)
Hoare, Rt. Hon. Sir S.
Russell, R. J. (Eddisbury)


Brown, Rt. Hon. E. (Leith)
Holmes, J. S.
Russell, S. H. M. (Darwen)


Brown, Brig.-Gen. H. C. (Newbary)
Hopkinson, A.
Salmon, Sir I.


Browne, A. C. (Belfast, W.)
Hersbrugh, Florence
Sanderson, Sir F. B.


Bull, B. B.
Hudson, Capt. A. U. M. (Hack., N.)
Scott, Lord William


Bullock, Capt. M.
Hudson, Rt. Hon. R. S. (Southport)
Selley, H. R.


Campbell, Sir E. T.
Hulbert, N. J.
Shakespeare, G. H.


Carver, Major W. H.
Hume, Sir G. H.
Shaw, Captain W. T. (Forfar)


Cayzer, Sir H. R. (Portsmouth, S.)
Hunloke, H. P.
Shepperson, Sir E. W.


Cazalet, Thelma (Islington, E.)
Hunter, T.
Shute, Colonel Sir J. J.


Channon, H.
Hutchinson, G. C.
Simon, Rt. Hon. Sir J. A.


Chapman, Sir S. (Edinburgh, S.)
James, Wing-Commander A. W. H.
Smiles, Lieut.-Colonel Sir W. D.


Chorlton, A. E. L.
Jarvis, Sir J. J.
Smith, Bracewell (Dulwich)


Christie, J. A.
Joel, D. J. B.
Smith, Sir R. W. (Aberdeen)


Clarry, Sir Reginald
Jones, L. (Swansea W.)
Smithers, Sir W.


Cobb, Captain E. C. (Preston)
Keeling, E. H.
Somervell, Rt. Hon. Sir Donald


Colville, Rt. Hon. John
Kerr, Colonel C. I. (Montrose)
Spans. W. P.


Conant, Captain R. J. E.
Kerr, J. Graham (Scottish Unit's.)
Stanley, Rt. Hon. Lord (Fylde)


Cook, Sir T. R. A. M. (Norfolk N.)
Keyes, Admiral of the Fleet Sir R.
Stewart, J. Henderson (Fife, E.)


Cooke, J. D. (Hammersmith, S.)
Lamb, Sir J. Q.
Stourton, Major Hon. J. J.


Cooper, Rt. Hn. T. N. (E'nburgh, W.)
Law, Sir A. J. (High Peak)
Strauss, E. A. (Southwark, N.)


Courthope, Col. Rt. Hon. Sir G. L.
Leech, Sir J. W.
Stuart, Hon. J. (Moray and Nairn)


Cox, H. B. Trevor
Lees-Jones, J.
Sueter, Rear-Admiral Sir M. F.


Crookshank, Capt. H. F. C.
Leighton, Major B. E. P.
Tate, Mavis C.


Cross, R. H.
Lipson, D. L.
Taylor, C. S. (Eastbourne)


Crossley, A. C.
Mebane, W. (Huddersfield)
Thomas, J. P. L.


Crowder, J F. E.
M'Connell, Sir J.
Thomson, Sir J. D. W.


Cruddas, Col. B.
Macdonald, Capt. T. (Isle of Wight)
Titchfield, Marquess of


Davies, Major Sir G. F. (Yeovil)
McEwen, Capt. J. H. F.
Tree, A. R. L. F.


Davison, Sir W. H.
McKie, J. H.
Turton, R. H.


De la Bère, R.
Maclay, Hon. J. P.
Wakefield, W. W.


Denville, Alfred
Macmillan, H. (Stockton-on-Tees)
Walker-Smith, Sir J.


Despencer-Robertson, Major J. A. F.
Maitland, A.
Wallace, Capt. Rt. Hon. Euan


Doland, G. F.
Makins, Brigadier-General Sir Ernest
Ward, Lieut.-Col. Sir A. L. (Hull)


Donner, P. W.
Manningham-Buller, Sir M.
Ward, Irene M. B. (Wallsend)


Dorman-Smith, Major Sir R. H.
Margesson, Capt. Rt. Hon. H. D. R.
Wardlaw-Milne, Sir J. S.


Drewe, C.
Mason, Lt.-Col. Hon. G. K. M.
Waterhouse, Captain C.


Duckworth, Arthur (Shrewsbury)
Maxwell, Hon. S. A.
Watt, Major G. S. Harvie


Dugdale, Captain T. L.
Mayhew, Lt.-Col. J.
Wayland, Sir W. A.


Duncan, J. A. L.
Mills, Major J. D. (New Forest)
Wells, Sir Sydney


Dunglass, Lord
Moore, Lieut.-Col. Sir T. C. R.
Whiteley, Major J. P. (Buckingham)


Eckersley, P. T.
Morris-Jones, Sir Henry
Wickham, Lt.-Col. E. T. R.


Ellis, Sir G.
Morrison, G. A. (Scottish Univ's.)
Williams, H. G. (Croydon, S.)


Elmley, Viscount
Morrison, Rt. Hon. W. S. (Cirencester)
Willoughby de Eresby, Lord


Emery, J. F.
Neven-Spence, Major B. H. H.
Wilson, Lt.-Col. Sir A. T. (Hitchin)


Emrys-Evans, P. V.
Nicolson, Hon. H. G.
Windsor-Clive, Lieut.-Colonel G.


Entwistle, Sir C. F.
O'Connor, Sir Terence J.
Womersley, Sir W. J.


Errington, E.
O'Neill, Rt. Hon. Sir Hugh
Wood, Hon. C. I. C.


Erskine-Hill, A. G.
Patrick, C. M.
Wood, Rt. Hon. Sir Kingsley


Evans, Capt. A. (Cardiff, S.)
Peake, O.
Wright, Wing-Commander J. A. C.


Fleming, E. L.
Perkins, W. R. D.
Young, A. S. L. (Partick)


Fremantle, Sir F. E.
Petherick, M.



Furness, S. N.
Pickthorn, K. W. M.
TELLERS FOR THE AYES.—


Fyfe, D. P. M.
Porritt, R. W.
Major Sir James Edmondson and




Major Herbert.




Acland, R. T. D. (Barnstaple)
Griffiths, J. (Llanelly)
Parker, J.


Adams, D. (Consett)
Guest, Dr. L. H. (Islington, N.)
Parkinson, J. A.


Adams, D. M. (Poplar, S.)
Hall, J. H. (Whitechapel)
Pearson, A.


Adamson, W. M.
Hardie, Agnes
Pethick-Lawrence, Rt. Hon. F. W.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Harris, Sir P. A.
Poole, C. C.


Attlee, Rt. Hon. C. R.
Harvey, T. E. (Eng. Univ's.)
Price, M. P.


Banfield, J. W.
Hayday, A.
Ridley, G.


Barnes, A. J.
Henderson, A. (Kingswinford)
Riley, B.


Barr, J.
Henderson, J. (Ardwick)
Ritson, J.


Betey, J.
Henderson, T. (Tradeston)
Roberts, W. (Cumberland, N.)


Benn, Rt. Hon. W. W.
Hicks, E. G.
Robinson, W. A. (St. Helens)


Benson, G.
Hills, A. (Pontefract)
Rothschild, J. A. de


Bevan, A.
Holdsworth, H.
Salter, Dr. A. (Bermondsey)


Broad, F. A.
Hopkin, D.
Sanders, W. S.


Bromfield, W.
Jagger, J.
Sexton, T. M.


Brown, C. (Mansfield)
Jenkins, A. (Pontlypool)
Shinwell, E.


Buchanan, G.
Jenkins, Sir W. (Neath)
Silverman, S. S.


Burke, W. A.
John, W.
Simpson, F. B.


Cape, T.
Jones, A. C. (Shipley)
Sinclair, Rt. Hon. Sir A. (C'thn's)


Cassells, T.
Jones, Sir H. Haydn (Merioneth)
Smith, Ben (Rotherhithe)


Charleton, H. C.
Jones, Morgan (Caerphilly)
Smith, E. (Stoke)


Chater, D.
Kelly, W. T
Smith, Rt. Hon. H. B. Leas (K'ly)


Clime, W. S.
Kennedy, Rt. Hon. T.
Smith, T. (Normanton)


Cocks, F. S.
Kirby, B. V.
Sorensen, R. W.


Collindridge, F.
Lansbury, Rt. Hon. G.
Stephen, C.


Cove, W. G.
Lathan, G.
Stewart, W. J. (H'ght'n-le-sp'ng)


Cripps, Hon. Sir Stafford
Lawson, J. J.
Stokes, R. R.


Dagger, G.
Leach, W.
Strauss, G. R. (Lambeth, N.)


Dalton, H.
Lee, F.
Summerskill, Dr. Edith


Davidson, J. J. (Maryhill)
Leonard, W.
Taylor, R. J. (Merpeth)


Davies, S. O. (Merthyr)
Leslie, J. R.
Thurtle, E.


Day, H.
Logan, D. G.
Tinker, J. J.


Dobbie, W.
Lunn, W.
Tomlinson, G.


Dunn, E. (Rather Valley)
Macdonald, G. (Ince)
Viant, S. P.


Ede, J. C.
McEntee, V. La T.
Walkden, A. G.


Edwards, A. (Middlesbrough E.)
McGhee, H. G.
Walker, J.


Edwards, Sir C. (Bedwellty)
McGovern, J.
Watkins, F. C.


Evans, D. O. (Cardigan)
Maclean, N.
Watson, W. McL.


Fletcher, Lt.-Comdr. R. T. H.
Mander, G. le M.
Wedgwood, Rt. Hon. J. C.


Foot, D. M.
Mothers, G.
Westwood, J.


Frankel, D.
Maxton, J.
White, H. Graham


Gallacher, W.
Messer, F.
Wilkinson, Ellen


Gardner, B. W.
Montague, F.
Williams, D. (Swansea, E.)


George, Rt. Hon. D. Lloyd (Carn'v'n)
Morrison, Rt. Hon. H. (Hackney, S.)
Williams, E. J. (Ogmore)


George, Major G. Lloyd (Pembroke)
Morrison, R. C. (Tottenham, N.)
Williams, T. (Don Valley)


Gibson, R. (Greenock)
Nathan, Colonel H. L.
Wilson, C. H. (Attercliffe)


Green, W. H. (Deptford)
Naylor, T. E.
Woods, G. S. (Finsbury)


Greenwood, Rt. Hon. A.
Oliver, G. H.



Grenfell, D. R.
Owen, Major G.
TELLERS FOR THE NOES.—




Mr. Anderson and Mr. Groves.

Motion made, and Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 227; Noes, 147.

Division No. 244.]
AYES
[5.32 p.m.


Agnew, Lieut.-Comdr. P. G.
Burgin, Rt. Hon. E. L.
Davison, Sir W. H.


Allen, Col. J. Sandeman (B'knhead)
Campbell, Sir E. T.
De Chair, S. S.


Allen, Lt.-Col. Sir W. J. (Armagh)
Carver, Major W. H.
De la Bère, R.


Amery, Rt. Hon. L. C. M. S.
Cayzer, Sir H. R. (Portsmouth, S.)
Denville, Alfred


Assheton, R.
Cazalet, Thelma (Islington, E.)
Despencer-Robertson, Major J. A. F.


Astor, Major Hon. J. J. (Dover)
Channon, H.
Doland, G. F.


Astor, Viscountess (Plymouth, Sutton)
Chapman, Sir S. (Edinburgh, S.)
Donner, P. W.


Atholl, Duchess of
Chorlton, A. E. L.
Dorman-Smith, Major Sir R. H.


Baillie, Sir A. W. M.
Christie, J. A.
Drewe, C.


Balfour, Capt. H. H. (Isle of Thanet)
Clarry, Sir Reginald
Duckworth, Arthur (Shrewsbury)


Baxter, A. Beverley
Cobb, Captain E. C. (Preston)
Dugdale, Captain T. L.


Beamish, Rear-Admiral T. P. H.
Colville, Rt. Hon. John
Duncan, J. A. L.


Beauchamp, Sir B. C.
Conant, Captain R. J. E.
Dunglass, Lord


Beaumont, Hon. R. E. B. (Portsm'h)
Cook, Sir T. FL A. M. (Norfolk, N.)
Eckersley, P. T.


Birchall, Sir J. D.
Cooke, J. D. (Hammersmith, S.)
Ellis, Sir G.


Bird, Sir R. B.
Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Elmley, Viscount


Blair, Sir R.
Courthope, Col. Rt. Hon. Sir G. L.
Emery, J. F.


Boulton, W. W.
Cox, H. B. Trevor
Emrys-Evans, P. V.


Bower, Comdr. R. T.
Crookshank, Capt. H. F. C.
Entwistle, Sir C. F.


Briscoe, Capt. R. G.
Croom-Johnson, R. P.
Errington, E.


Brown, Col. D. C. (Hexham)
Cross, R. H.
Erskine-Hill, A. G.


Brown, Rt. Hon. E. (Leith)
Crossley, A. C.
Evans, Capt. A. (Cardiff, S.)


Brown, Brig.-Gen. H. C. (Newbury)
Crowder, J. F. E.
Fleming, E. L.


Browne, A. C. (Belfast, W.)
Cruddas, Col. B.
Fremantle, Sir F. E.


Bull, B. B.
Culverwell, C. T.
Furness, S. N.


Bullock, Capt. M.
Davies, Major Sir G. F. (Yeovil)
Fyfe, D. P. M.




Gledhill, G.
McKie, J. H.
Salley, H. R.


Glyn, Major Sir R. G. C.
Maclay, Hon. J. P.
Shakespeare, G. H.


Goldie N. B.
Macmillan, H. (Stockton-on-Tees)
Shaw, Captain W. T. (Forfar)


Gower, Sir R. V.
Maitland, A.
Shepperson, Sir E. W.


Graham, Captain A. G. (Wirral)
Makins, Brigadier-General Sir Ernest
Shute, Colonel Sir J. J.


Grant-Ferris, R.
Manningham-Buller, Sir M.
Simon, Rt. Hon. Sir J. A.


Gretton, Col. Rt. Hon. J.
Margesson, Capt. Rt. Hon. H. D. R.
Smiles, Lieut. Colonel Sir W. D.


Gridley, Sir A. B.
Mason, Lt.-Col. Hon. G. K. M.
Smith, Bracewell (Dulwich)


Grimston, R. V.
Maxwell, Hon. S. A.
Smith, Sir R. W. (Aberdeen)


Guest, Lieut.-Colonel H. (Drake)
Mayhew, Lt.-Col. J.
Smithers, Sir W.


Guest, Hon. I. (Brecon and Radnor)
Mills, Major J. D. (New Forest)
Somervell, Rt. Hon. Sir Donald


Guest, Maj. Hon. O. (C'mb'rw'll, N.W)
Moore, Lieut.-Colonel Sir T. C. R.
Spans, W. P.


Hannah, I. C.
Morris-Jones, Sir Henry
Stanley, Rt. Hon. Lord (Fylde)


Harbord, A.
Morrison, G. A. (Soottish Univ's.)
Stanley, Rt. Hon. Oliver (W'm'l'd)


Haslam, Henry (Hornoastle)
Morrison, Rt. Hon. W. S. (Cirencester)
Stewart, J. Henderson (Fife, E.)


Heilgers, Captain F. F. A.
Neven-Spence, Major B. H. H.
Stourton, Major Hon. J. J.


Hely-Hutchinson, M. R.
Nicolson, Hon. H. G.
Strauss, E. A. (Southwark, N.)


Heneage, Lieut.-Colonel A. P.
O'Connor, Sir Terence J.
Stuart, Hon. J. (Moray and Nairn)


Hepburn, P. G. T. Buchan-
O'Neill, Rt. Hon. Sir Hugh
Sueter, Rear-Admiral Sir M. F.


Hepworth, J.
Patrick, C. M.
Tate, Mavis C.


Higgs, W. F.
Peake, O.
Taylor, C. S. (Eastbourne)


Hoare, Rt. Hon. Sir S.
Perkins, W. R. D.
Thomas, J. P. L.


Holmes, J. S.
Petherick, M.
Thomson, Sir J. D. W.


Hope, Captain Hon. A. O. J.
Pickthorn, K. W. M.
Titchfield, Marquess of


Hopkinson, A.
Ponsonby, Col. C. E.
Tree, A. R. L. F.


Horsbrugh, Florence
Porritt, R. W.
Turton, R. H.


Hudson, Capt. A. U. M. (Hook., N.)
Pownall, Lt.-Col. Sir Assheton
Wakefield, W. W.


Hudson, Rt. Hon. R. S. (Southport)
Procter, Major H. A.
Walker-Smith, Sir J.


Hulbert, N. J.
Radford, E. A.
Wallace, Capt. Rt. Hon. Euan


Hume, Sir G. H.
Raikes, H. V. A. M.
Ward, Lieut.-Col. Sir A. L. (Hull)


Hunloke, H. P.
Ramsden, Sir E.
Ward, Irene M. B. (Wallsend)


Hunter, T.
Rankin, Sir R.
Wardlaw-Milne, Sir J. S.


Hutchinson, G. C.
Rathbone, J. R. (Bodmin)
Waterhouse, Captain C.


James, Wing-Commander A. W. H.
Rawson, Sir Cooper
Watt, Major G. S. Harvie


Jarvis, Sir J. J.
Rayner, Major R. H.
Wayland, Sir W. A


Joel, D. J. B.
Reed, A. C. (Exeter)
Wells, Sir Sydney


Jones, L. (Swansea W.)
Reed, Sir H. S. (Aylesbury)
Whiteley, Major J. P. (Buckingham)


Keeling, E. H.
Reid, J. S. C. (Hlllhead)
Wickham, Lt.-Col. E. T. R.


Kerr, Colonel C. I. (Montrose)
Reid, W. Allan (Derby)
Williams, H. G. (Croydon, S.)


Kerr, J. Graham (Scottish Univs.)
Rickards, G. W. (Skipton)
Willoughby de Eresby, Lord


Keyes, Admiral of the Fleet Sir R.
Robinson, J. R. (Blackpool)
Wilson, Lt.-Col. Sir A. T. (Hitchin)


Lamb, Sir J. Q.
Ropner, Colonel L.
Windsor-Clive, Lieut.-Colonel G.


Law, Sir A. J. (High Peak)
Rosa Taylor, W. (Woodbridge)
Womersley, Sir W. J.


Leech, Sir J. W.
Rowlands, G.
Wood, Hon. C. I. C.


Lees-Jones, J.
Royds, Admiral Sir P. M. R.
Wood, Rt. Hon. Sir Kingsley


Leighton, Major B. E. P.
Ruggles-Brise, Colonel Sir E, A.
Wright, Wing-Commander J. A. C.


Lipson, D. L.
Russell, Sir Alexander
Young, A. S. L. (Partick)


Mebane, W. (Huddersfield)
Russell, R. J. (Eddisbury)



M'Connell, Sir J.
Salmon, Sir I.
TELLERS FOR THE AYES.


Macdonald, Capt. P. (Isle of Wight)
Sanderson, Sir F. B.
Major Sir James Edmondson


McEwen, Capt. J. H. F.
Scott, Lord William
and Major Herbert.




NOES.


Acland, R. T. D. (Barnstaple)
Davies, S. O. (Merthyr)
Hopkin, D.


Adams, D. (Consett)
Day, H.
Jagger, J.


Adams, D. M. (Poplar, S.)
Dobbie, W.
Jenkins, A. (Pontypool)


Adamson, W. M.
Dunn, E. (Rother Valley)
Jenkins, Sir W. (Neath)


Alexander, Rt. Hon. A. V. (H'lebr.)
Ede, J. C.
John, W.


Anderson, F. (Whitehavan)
Edwards, A. (Middlesbrough E.)
Jones, A. C. (Shipley)


Attlee, Rt. Hon. C. R.
Edwards, Sir C. (Bedwellty)
Jones, Sir H. Haydn (Merioneth)


Bonfield, J. W.
Evans, D. O. (Cardigan)
Jones, Morgan (Caerphilly)


Barnes, A. J.
Fletcher, Lt.-Comdr. R. T. H.
Kelly, W. T


Barr, J.
Foot, D. M.
Kennedy, Rt. Hon. T.


Betsy, J.
Frankel, D.
Kirby, B. V.


Bann, Rt. Hon. W. W.
Gallacher, W.
Lansbury, Rt. Hon. G.


Benson, G.
Gardner, B. W.
Lathan, G.


Bevan, A.
George, Major G. Lloyd (Pembroke)
Lawson, J. J.


Broad, F. A.
Gibson, R. (Greenock)
Leach, W.


Bromfield, W.
Green, W. H. (Deptford)
Lee, F.


Brown, C. (Mansfield)
Greenwood, Rt. Hon. A.
Leonard, W.


Buchanan, G.
Granfell, D. R.
Leslie, J. R.


Burke, W. A.
Griffiths, J. (Llanelly)
Logan, D. G.


Cape, T.
Guest, Dr. L. H. (Islington, N.)
Lunn, W.


Cassells, T.
Hall, J. H. (Whitechapel)
Macdonald, G. (Ince.)


Charleton, H. C.
Hardie, Agnes
MoEntee, V. La T.


Chater, D.
Harris, Sir P. A.
McGhee, H. G.


Cluse, W. S.
Harvey, T. E. (Eng. Univ's.)
McGovern, J.


Cocks, F. S.
Hayday, A.
Maclean, N.


Collindridge, F.
Henderson, A. (Kingswinford)
Mender, G. le M.


Cove, W. G.
Henderson, J. (Ardwick)
Maxton, J.


Cripps, Hon. Sir Stafford
Henderson, T. (Tradeston)
Messer, F.


Dagger, G.
Hicks, E. G.
Montague, F.


Dalton, H.
Hills, A. (Pontefract)
Morrison, Rt. Hon. H. (Hackney, S.)


Davidson, J. J. (Maryhill)
Holdsworth, H.
Morrison, R. C. (Tottenham, N.)







Muff, G.
Salter, Dr. A. (Bermondsey)
Tinker, J. J.


Nathan, Colonel H. L.
Sanders, W. S.
Tomlinson, G.


Naylor, T. E.
Sexton. T. M.
Viant, S. P.


Oliver, G. H.
Shinwell, E.
Walkden, A. G.


Owen, Major G.
Silverman, S. S.
Walker, J.


Paling, W.
Simpson, F. B.
Watkins, F. C.


Parker, J.
Sinclair, Rt. Hon. Sir A. (C'thn's)
Watson, W. McL.


Parkinson, J. A.
Smith, Ben (Rotherhithe)
Wedgwood, Rt. Hon. J. C.


Pearson, A.
Smith, E. (Stoke)
Westwood, J.


Pethick-Lawrence, Rt. Hon. F. W.
Smith, Rt. Hon. H. B. Lees (K'ly)
White, H. Graham


Poole, C. C.
Smith, T. (Normanton)
Wilkinson, Ellen


Price, M. P.
Sorensen, R. W.
Williams, D. (Swansea, E.)


Ridley, G.
Stephen, C.
Williams, E. J. (Ogmore)


Riley, B.
Stewart, W. J. (H'ght'n-le-Sp'ng)
Williams, T. (Don Valley)


Ritson, J.
Stokes, R. R.
Wilson, C. H. (Attercliffe)


Roberts, Rt. Hon. F. O. (W. Brom.)
Strauss, G. R. (Lambeth, N.)
Woods, G. S. (Finsbury)


Roberts, W. (Cumberland, N.)
Summerskill, Dr. Edith



Robinson, W. A. (St. Helens)
Taylor, R. J. (Morpeth)
TELLERS FOR THE NOES.


Rothschild, J. A. de
Thurtle, E.
Mr. Mathers and Mr. Groves.


Question put, and agreed to.

CLAUSE 2.—(Preference for home produced oils.)

5.41 p.m.

Colonel Sandeman Allen: I beg to move, in page 2, line 9, to leave out "twelve," and to insert "six."
The reason why I have tabled this Amendment is to get some explanation from the Treasury Bench as to what exactly they mean by saying in the Bill that "during the period of twelve years" the preference shall remain. Do they simply mean that, or do they imply further that the present high rate of tax on petrol shall continue for 12 years? If it is simply assistance for the home produced oils from shale and coal, I have no objection; but the implication that the 9d. tax on petrol is going on for 12 years seems to require some explanation. I have moved the Amendment in the hope that the Minister will be able to tell us that such is not the case, and that it is simply a matter of protection for the home industry.

5.42 p.m.

Major Owen: I beg to support the Amendment. I have spoken on this matter on previous occasions in this House, and I have dared to prophesy that the period first envisaged for this relief of home produced oils would not be sufficient. In the Debate on 25th July, 1933, I said:
You can produce any amount of oil from coal, just as you can produce any amount of sugar from beet; but at what cost? When the first subsidy was granted to sugar beet it was to be only for a period; but what happened? They came again for a little more. That is the danger. I fear that at the end of the four and a-half years if the 8d. Import Duty is still in existence Imperial Chemical Industries and others will come along and ask for an extension of the period.
I proceeded to say:

I ask the House to give careful consideration to this matter because on the question of employment the number you put on by this process will be displaced in the oil industry."—[OFFICIAL REPORT, 25th July, 5933; col. 2466, Vol. 280.]
It seems to me that what I have foreshadowed has come to pass, and to-day we are asked to tie the House of Commons to a subsidy to this industry for a period of 12 years at the current rate of the Customs Duty on imported oil. Since that date we have had the report of the Falmouth Sub-Committee on oil from coal. This report, if it has any value at all, proves conclusively that it is impossible to produce oil from coal on a commercial basis. I am quite ready—so is everybody in the Committee—to do whatever is possible to restore prosperity in the coal industry, but, as I pointed out in a previous Debate, I think the cost of doing so is far too great.
I ask the Chancellor of the Exchequer to consider limiting this period by cutting it down to half at least. Next year, if the Chancellor of the Exchequer so wished, he could alter the period, but why should we to-day tie down the Committee to a period of 12 years. If this industry is going to be of any service to the country, it should be able to prove its worth before that time. I remember that during the debates in those days we were told that the production of oil from coal in this country would be of great benefit to the coal industry, and I should like to know from the Chancellor of the Exchequer how many extra miners have been employed in this country as a result of this process.

The Deputy-Chairman: I do not want to interrupt the hon. and gallant Gentleman unduly, but I must point out to him that either we must restrict discussion very strictly to the point whether it be


for 12 years or six years, which is now before the Committee, and discuss the general question of whether the policy is desirable on the Question that the Clause stand part, or, if we have the wider discussion now, the arguments must not be resumed when we discuss the Clause later. I am in the hands of the Committee.

Major Owen: I hoped that we should be able to deal with the Amendment in the same way as we dealt with the Amendment on the previous Clause, namely, have a more or less general discussion, and that the various Amendments could then be put to the vote. I do not know whether you have expressed and Ruling on that point or not, and I should like to know.

The Deputy-Chairman: I express no opinion on the subject, but will merely take whatever course is most convenient to the Committee in general. If it is agreed by the Committee, I am willing to take the wider discussion now on the understanding that the arguments are not repeated later.

Major Owen: I am very much obliged. I felt that I was rather extending the scope of the argument in dealing with the matter which I have just raised. There were arguments put forward at the time when the then Prime Minister in 1934 announced this subsidy to the hydrogenation process in particular, but it included every other process of producing oil from coal in this country. There were speakers in the House at that time who seemed to think that it was the salvation of the coal industry. I ventured to differ, and I believe that if we read the Falmouth Report we shall find that that has not been proved to be the case. I will take, first of all, the low temperature carbonisation process, and quote paragraph 119 of the Falmouth Report:
The question then arises: What are the prospects of a really large-scale development of low temperature carbonisation?—and to this point the Committee have given careful consideration.
Paragraph 120 says:
From the figures quoted in the Table in paragraph 109 it will be seen that the low temperature carbonisation method is first and foremost a coke-producing process, and that in consequence its commercial value is dependent on the possibility of disposing of

the coke. This was accepted by the representatives of the Low Temperature Coal Distillers' Association.
It says, in paragraph 123:
The Committee further examined the claim made by many advocates of low temperature coke that a big development of this process would bring about a much wished for revival in the coal industry.
Paragraph 124:
The Committee have to report, however, in this connection, that the conclusions they arrived at were disappointing. In so far as low temperature coke might be used as a substitute for raw coal, very little increased demand for coal would ensue, as it is calculated that only 10 per cent. more coal would be required to give an equivalent amount of fuel and heat value.
The Committee further say that the coal producers themselves were not very enamoured of this process because the result would be that people who now purchase coal for private purposes would no longer purchase it if coke from the low-temperature carbonisation process were available at low rates. What does the report say about the question of hydrogenation?
This programme"—
that is, the programme of the Billingham experiment—
could only have been carried through by an undertaking having great resources, both financial and technical. It is a high testimony to the skill of all concerned that the plant is now virtually in full operation. In 1936, the production was about 120,000 tons of petrol, and the estimated production for 1937 is 130,000 tons, against a designed capacity of 150,000 tons.
However, in spite of the most thorough investigation at each of the earlier stages in the development, difficulties which were not anticipated have been experienced in the large scale plant, which have involved the company in some expense and delay. With any process as novel as this, it is not surprising that this should he so and the experience of Billingham suggests very forcibly the necessity of accepting with caution any schemes of this kind involving very large capital expenditure, even if there is available, as in this case, great experience and data based on the most preparatory work.
Here is a very important point, particularly as I had been arguing at that time that we must have supplies for our air-craft in time of war. In paragraph 150 the report of the Falmouth Committee says:
It may be mentioned that, apart from the difficulties arising from the working of the plant, twice since the plant started the quality of the petrol has had to be improved to meet the demands of the market for petrols


with higher octane numbers. This has inevitably resulted in some reduction of the plant yields.
Any petrol used in aircraft must have high octane numbers, and you cannot get that from petrol produced from coal. So that in fact, however much we may produce by the hydrogenation process, we would have to import oil from other countries before that oil could be used in our aircraft. It was argued at that time that, if we produced oil from coal in this country, it would be a measure of safety and security for us in time of war. What does the Falmouth Committee say with regard to that? In paragraph 289 they say:
Much stress has been laid, by those who advocate the encouragement of home production of oil, on the greater security which the country would obtain as compared with reliance on imported supplies. It is reasonable to assume that a large proportion of the tankers required for our oil imports would escape enemy attack. Furthermore, in the transport of seaborne oil, and also in the case of storage in this country, the risks would be spread over a very large number of units, and, though losses would be inevitable, the policy of storage and replenishment from overseas should provide adequate security for our oil requirements.
In paragraph 290—and this is the point I made myself in the course of a speech in this House—they say:
In the case of hydrogenation plants, on the other hand, the risks would be concentrated. The plants must of necessity be large, and would therefore provide conspicuous targets and he extremely vulnerable to air attack.
There is another objection, and that is the question of cost. In paragraph 230 the committee report:
In these circumstances, it is abundantly evident that, so long as the price of imported fuel remains in the neighbourhood of the present figure, the case for home-produced oil, judged by purely economic standards, falls to the ground. Hence it follows that if it is desirable for any of the reasons mentioned in paragraph 238 to produce oil from coal or other indigenous materials, Government assistance in one form or another must be forthcoming.
Candidly, I should like to see something done for the coal industry in this country which would restore its prosperity, but, as I said on that occasion, I am afraid—and the facts have proved it since—that the low-temperature carbonisation method, the hydrogenation method, and the Fischer method are not likely to restore prosperity to the coal industry. They are not likely to give

us an adequate or a safe supply in time of war. In addition to that, economically, it is going to cost the country and the Revenue an enormous amount, as has been explained already to the Committee this afternoon. The amount that is paid in taxation in respect of oil imported into this country is enormous, somewhere in the neighbourhood of £60,000,000 per annum. If we continue this process and apply it to all oils produced in this country, whatever may be the material from which that oil is produced, the cost to the country will be out of all proportion to the benefits the country will gain from it. I ask the Chancellor of the Exchequer seriously to consider whether it is in the interests of the country as a whole, of the coal industry, of the men and their families who depend upon the coal industry for their living and comfort to continue with this when we have at our disposal ample supplies of natural oil produced by British capital and British employes practically all over the world. It is work that employs hundreds and thousands of sailors in tankers, and in refineries put up by British capital, and I ask whether it is worth while to continue with this proposal and to extend the period for another 12 years?
We were led to understand, and there were members of the House at that time who said, that in the course of four-and-a-half years the process would have been so much improved that they would no longer require this support from the State. That has been proved to be a completely wrong and mistaken idea. The process has not improved and the cost of producing this oil without the subsidy is altogether impossible. I therefore plead with the Chancellor of the Exchequer to limit the period to six years. I should be only too happy to think that this process could be perfected within a reasonable period. I for one, at any rate, in view of the depression in the coal industry, would not oppose it, but to continue it in the present circumstances, in face of the Falmouth Report, is an entirely wrong thing unless the Government are prepared to say that it is a subsidy and nothing else. I ask the Chancellor of the Exchequer to accept the Amendment and to reduce the period to six years.

6 p.m.

Mr. James Griffiths: I thank you for your Ruling, Captain Bourne, that we may discuss this subject in a large way. The Chancellor of the Exchequer was good enough, in reply to a question on 18th May, to say that he proposed to include a Clause of this kind in the Finance Bill because the Government had given consideration to the Famouth Committee's Report and had decided to accept its recommendations. One of the recommendations, which the hon. and gallant Member for Carnarvonshire (Major Owen) neglected, was that this preferential duty shall be stabilised for a period of 12 years. I share the views of the hon. and gallant Member in one respect, that on reading the report and then coming to the recommendations the report is in many ways a complete condemnation of any method of extracting oil from coal. On reading the document through, it is amazing to note that they make the recommendation that certain provisions should be made in order that the oil from coal industry might be maintained, and also developed.
The Falmouth's Committee's Report, and the way in which the investigation was conducted, have left those of us who are interested in the problem completely dissatisfied. We are of the opinion that the committee approached the problem from far too narrow an angle, that it completely omitted to take very important considerations into account, and that the report could not have been better written if it had been commissioned by the oil interests of this country. We in the coal-mining industry have given much thought and time to this matter and are convinced that from the beginning the oil interests have done everything, and they are doing everything, to prevent this native industry being developed in this country. The Falmouth Committee hold out scarcely any hope for this new industry. They say that it is too expensive, too imperfect, and that there is no hope of the industry being developed on any successful lines, and yet at the end of their report they make a recommendation which, quite frankly, cannot be understood, having regard to the nature of the report. They suggest that there should be a continuance of the guaranteed preference for a period of 12 years from 1938, and that the rate should be increased from 4d. to 8d. per gallon, and that the guarantee should be extended to include Diesel oil for use in

motor vehicles. It is that guarantee that is included in this Clause, and which the Chancellor of the Exchequer asks the committee to accept.
The committee dealt with the two major processes of extracting oil from coal that are in use in this country and in the world generally. There is, first, the method of low-temperature carbonisation. They do not propose that there should be any further assistance given to that beyond the help given by the preferential duty, and they express the hope that under the shelter of this preference the industry may be developed in this country. The other process, the synthetic process, known as hydrogenation, has been dealt with, in our opinion, in a very unsatisfactory way. They do not recommend that the Government should take up the matter; all that they say is that they consider that it would be an advantage if a plant were established in this country to work the Fischer process, and they express the hope that somebody or other, some financiers, will come forward and put down the plant. If I was speaking to our own men I should call that the height of cheek, seeing that the committee have not gone into the matter as carefully as they ought to have done.
This is the 'first investigation by a Government committee undertaken in connection with this problem, and we are of opinion that the committee have not done their job as thoroughly as they ought to have done. This synthetic process, this hydrogenation process, has much attraction as compared with the other process, because it leave no residue behind, all the coal being converted into oil. It is not a process of extracting oil from coal but of liquefying coal into oil. The committee suggest that it is desirable that a plant should be established in this country of a substantial size for the production of not less than 20,000 or 30,000 tons of primary products per annum, and they express the hope that someone will come forward and be prepared to find the money. I do not know whom they expect to come forward but I am afraid that after reading their report anyone would be disposed to turn it down.
The committee say that they have heard a good deal of evidence in private. A large number of persons, experts and persons connected with companies operating processes, were asked to give evidence,


and those persons requested that their evidence should be treated as private. Their evidence was given only on that consideration. That evidence, which was given in private by persons interested in the industry, has obviously swayed the report. The report can be understood and accepted only on the assumption that the evidence which is not revealed to us is overwhelmingly against this process.

Major Owen: It has been submitted to the Government.

Mr. Griffiths: I do not think the evidence has been submitted to them. It may have been submitted to the Committee of Imperial Defence, of which this committee was a sub-committee.

The Chancellor of the Exchequer (Sir John Simon): That is so.

Mr. Griffiths: Therefore, the Cabinet in making their decision are in no better position than the House.

Major Owen: Oh, yes.

Mr. Griffiths: I understood that the Chancellor of the Exchequer had not seen the private evidence that was before the Committee.

Sir J. Simon: I do not want to state anything more positively than I know. Therefore, I am speaking subject to correction, if I do not state it rightly, but my understanding is that the Committee of Imperial Defence had all this material before them, and, as the hon. Member knows, members of the Cabinet who are specially concerned are members of the Committee of Imperial Defence.

Mr. Griffiths: This House has not the evidence. All that we have is simply a paragraph in the report that the evidence was given in private. This is an important matter of national policy. Why should this Committee to-day, or the country, be asked to pronounce definitely upon this question of oil from coal on a report in which the evidence is kept from us? Who has the evidence? Imperial Chemical Industries. They have arrangements with the oil industry. The oil industries of Europe have a stranglehold on the industries that extract oil from coal. From the beginning the oil interests have watched this new development. They have gone sound every-

where and have bought up pits. They have a stranglehold. No one can sell a gallon of petrol extracted from the oil from coal processes in this country except through the usual agencies. From the start this matter has been looked at more from the standpoint of safeguarding the oil interests than from the future prospects of the coal mines of this country.
In accepting the report as it is there are certain aspects to which the committee have only given very cursory investigation and consideration. We approach this problem from the standpoint of the coal-mining industry, upon which the industrial life of this country in the last century was built up. In the last 10 or 12 years the coal industry has been faced with this great new competitive fuel, and we face the problem from the standpoint as to whether this new development, this new fuel, petrol, does take the place of coal. To the degree that it does, it closes our pits, displaces our men and creates a very serious community problem for us. From the national interest the right way to approach the problem is to consider whether it is possible to develop in our own industry, in our own country, from the raw materials that we have in abundance, an industry which can produce this fuel. If so, then we shall be able to maintain our mining communities and not destroy them as we are doing now. The Falmouth Committee has not done that. It has taken the question of cost purely on the question of the production of oil at this moment, at this stage in the development of this new industry as compared with the price of imported petrol. We say that the committee is not right in adopting that course. This new industry is in its experimental stage.

Major Owen: indicated dissent.

Mr. Griffiths: The hon. and gallant Member shakes his head. We have asked the Secretary for Mines whether the plant at Billingham has reached the stage when a pronouncement can he made, and he has told us almost every time that it is still in an expermiental stage and that they were still carrying on experiments, that they were trying variants of the original process, and that the time had not come to pronounce definitely upon it. But the Falmouth Committee have pronounced definitely. They have accepted


the relative cost at the present time and have used it to condemn the development of this process. We say that they ought not to have done that. The costs of extracting oil from coal are at their highest now, and there is every reason why we should continue experiments.
There are many different kinds of processes, low-temperature processes, for extracting oil from coal, and people interested in those processes wrote to the committee and asked to be allowed to appear as witnesses. They asked to be allowed to give their evidence and to be permitted to explain their processes, but they were denied that opportunity by the Falmouth Committee. The committee selected a small number of companies to give evidence before them, and a small number of processes, and declined to accept evidence from a large number of other pioneers in this industry. We say that this Committee to-day, the Government and the country ought not to accept the report of a committee which refused to hear the evidence of scientists and engineers who have given years of work to these processes. If there is to be an investigation, let everybody have a chance. Why should the big combines and companies have all the opportunity?
I had the pleasure of sitting on a committee set up by our own party to consider this subject. It has published a report, and I venture to say that it was a far better and more judicial investigation of this problem than was made by the Falmouth Committee. Everybody who had given years to the study of this problem and the working out of the processes was invited to give evidence. That is what should have been done by the Falmouth Committee instead of declining to accept a large volume of evidence from men who have given years and sacrificed much in order to develop their processes. In the circumstances I think we should accept their report with a good deal of reservation. The Falmouth Committee, in my view, dealt far too lightly with what is taking place in Germany and other countries. In Germany they have now reached the stage where they are actually extracting oil from lignite, brown coal. If German engineers can produce oil from brown coal, are we to take it that our engineers are so incompetent that there is no prospect of being able to develop the extraction of oil from coal, using the

coal which we have in such abundance in this country?

Mr. Lewis Jones: On a point of Order. I understood from the Deputy-Chairman that he would allow a rather wide discussion on this Amendment, and I would like to know for the guidance of the Committee whether in view of the speeches which have been made it is now open to anyone who takes part in these discussions to discuss in detail the Falmouth Report?

The Chairman (Sir Dennis Herbert): I think not. I have listened to what the hon. Member for Llanelly (Mr. J. Griffiths) has said. I am always loath to interrupt unnecessarily and I think that the greater part of his argument is in order and relevant to the Clause generally, but I think the Committee should bear in mind that we cannot go into the whole of the details of the Falmouth Committee's report.

Mr. Bevan: May I submit to you that the Chancellor of the Exchequer has said that this part of the Finance Bill has been incorporated in consequence of the recommendations of the Falmouth Committee, which recommendations followed the investigation which the committee made and the evidence it took? It seems to me that the Committee cannot usefully consider this part of the Finance Bill unless they are able to consider the evidence which influenced the Government.

The Chairman: I congratulate the hon. Member on coming to the same conclusion as I have just announced.

Mr. J. Griffiths: The Chancellor of the Exchequer, I think it was on 18th May, said that the Government proposed to accept the Falmouth Committee's report, and the Clause which we are now discussing is based on that report.

Sir J. Simon: I agree, and I understood at the time that the hon. Member was glad of the decision and rather welcomed it.

Mr. Griffiths: Yes, and I shall certainly vote against the Amendment. This is the only opportunity we have of discussing the Falmouth Committee's report.

The Chairman: The hon. Member says that it is the only opportunity, but now is not an opportunity to discuss the Falmouth Committee's report.

Mr. Griffiths: At any rate, the Government are proposing to accept one of their recommendations, and it cannot be thoroughly understood without having the report. I hope the Government will think again on this problem and will not accept the Falmouth Committee's report, about which there is a good deal of dismay and dissatisfaction in the country. The investigation was not properly completed. We shall vote for a continuance of this preference, because without it no industry of this kind can be created in this country. We hope that this industry will be developed.

6.22 p.m.

Mr. Hannah: I believe that I am about the most unsuitable person in the whole Committee to intervene in this Debate, being, as I imagine, the only Member of Parliament who does not possess a licence to drive a motor car, endorsed or unendorsed. I hope that I shall not be out of order in saying that my reason for intervening is to voice the strong discontent of some of my own constituents about the high taxation of motor fuel at the present time. In our Bilston area we have a number of places, I happen to live in one of them—

The Chairman: The hon. Member must find a more suitable opportunity for discussing motor taxation.

Mr. Hannah: My reason for objecting to the 12 years is because of the pessimistic view it appears to take. It implies that the high rates on motor fuel are going to last for all that time. I earnestly hope that there will come a time long before the 12 years have expired, when with peace re-established and when the world has returned to sanity, it will be possible very largely indeed to reduce these taxes.

Mr. Ellis Smith: We have a long way to go.

Mr. Hannah: We have, but I hope we shall get there under our present administration and, therefore, I support the Amendment in the hope that it will not be taken as an indication that these very high rates of taxation on motor fuel are to last for 12 whole years. I need hardly say that I hope that a purely native industry of extracting oil from coal will be satisfactorily built up. I should not for a moment support the Amendment if I thought it was in any way

antagonistic to such a hope. There is no doubt that from the point of view of this country there is nothing more important than getting fuel which is wanted on so large a scale for transport, both by land and sea, from the resources in our own country and, therefore, in the hope that we shall have a materially lower scale of taxation in 12 years' time I hope the Committee will accept the shorter period and reduce it to six years.

6.25 p.m.

Mr. R. Acland: I should like to ask the Chancellor of the Exchequer whether the opening words of this Clause:
During the period of 12 years from the passing of this Act,
are the usual, normal and proper words to be found in a Finance Act at all? Is it right that in 1938 we should apparently be settling some of the details of the Budget speech in 1950? If this is normal and proper can the Chancellor of the Exchequer give the Committee any guidance as to the limits to which such a process may be extended? Will it be proper for the Chancellor of the Exchequer next year, in what may well be his last Budget speech for some time, to insert a Clause at the instance of the present Minister for Agriculture and his supporters that for the next 12 years the preference given to beef produced from indigenous cows or bullocks shall be ¾d. per lb.? Would that be a proper Clause to find a place in next year's Finance Bill? If not, why is this proper? Will the Chancellor of the Exchequer in supporting the Clause, as I suppose he will, make it perfectly clear that a Chancellor of the Exchequer on a future occasion has every bit as much right to alter this preference, up or down, as he has to alter the Income Tax up or down, and that this industry has no more a vested interest in a preference of 8d. than has Lord Nuffield in a preference of 33¼ per cent.? I think it is absolutely impossible and contrary to all constitutional practice to attempt in one Finance Bill to fix what shall or shall not be done in a future Finance Bill. What may happen? We may get in power a Government which would make a strong stand against these monopolists and break in pieces this business of holding up patents. It might release a whole series of patents for the use of this industry. There may be new discoveries, some of which may not be snapped up by the oil importing industries. The hon. Member


for Rusholme (Mr. Radford) might discover or develop the production of some of these oils from potatoes, and he might come here and attack other companies which are making profits of 140 per cent. by the manufacture of some kind of spirit.

Mr. Radford: The company with which I am connected has never made an ounce of alcohol from potatoes or from any other raw material. The hon. Member is talking absolute nonsense.

Mr. Acland: I recollect a speech of an hon. Member on these benches who mentioned the figure, and I do not think it was contradicted then. My argument is that all sorts of things may be discovered and you may get companies making enormous profits out of oil from indigenous materials. Is it to be said that whatever happens no future Chancellor of the Exchequer will have the right to interfere with them until the Finance Bill of 1951? I hope the Chancellor of the Exchequer will give us an assurance that this Clause has no binding force whatever upon future Chancellors of the Exchequer.

6.30 p.m.

Mr. Bevan: I wish to make a few remarks only, as most of the ground has been covered very adequately by my hon. Friend the Member for Llanelly (Mr. J. Griffiths), who has devoted a great deal of attention to this problem. It is clear from the Falmouth Committee's Report that the recommendation upon which this Clause is based was either to some extent the result of representations made by the Committee of Imperial Defence or was arrived at very largely because of considerations of Imperial Defence. Otherwise, as my hon. Friend pointed out, the whole tone of the report would make the recommendation appear foolish, because throughout the report the committee comes down very heavily against the practicability of extracting oil from coal in Great Britain on a commercial basis. It is obvious that this plant, which it is recommended should be set up and should be supported by the preference, would not be established for technical reasons, because on page 42 of the report, the committee point out that the plant necessary for explorative technical work need not be as large as the one they recommend. Therefore, the recommendation is made for another purpose. Indeed, on

the same page, it is stated in paragraph 209, which has strict relevance to the recommendation on which the Clause is based, that—
Such a plant would not only provide valuable technical and economic data, but it would enable the nucleus of a staff to be trained which would be available when a larger production was required, and would provide facilities for large-scale research to be carried out. It would be also of great assistance in planning further plants if the national interest called for them or commercial concerns desired at any time to establish this type of process.
Therefore, the proposal is made, not because the committee consider that a plant consuming from 20,000 to 30,000 tons of coal per annum would be a commercial proposition, but because if such a plant were established in this country there would be available a trained staff for work of that sort. The necessity for such a trained staff is that at some time we might be involved in a conflict, that our resources of foreign oil might be cut off, and we might have to rely upon producing oil in larger and larger quantities, so that it would be necessary to have a staff which would be able to take charge of that work. The committee arrived at that recommendation and the Government accepted it, not for strict economic and commercial reasons, but for reasons of military strategy. To say that is, I think, to put the whole argument upon a fair basis, because if it were for commercial reasons the report of the committee would be different.
If that be the purpose of the recommendation, how is it being implemented by the proposals before the Committee? The Government say that there should be a preference. For what reason? In the hope that a number of individuals having cash to spare will take a more optimistic view than the Falmouth Committee, for that committee have done their best to depress the hopes and expectations of anyone who might want to engage in this production. The Government say that this plant is needed in the vital national interest, and at the same time they publish a report which has the effect of militating against that national interest. I do not believe that, if the Falmouth Committee's Report is accepted, even with the preference anyone in this country will construct plant of this sort. Although I and my hon. Friends who are intimately associated


with the mining industry cannot oppose this proposal, which is a small step to establish an oil-from-coal plant in Great Britain, nevertheless we are bound to say to the Government that a more maladroit and inadequate way of dealing with the problem could not have been devised. If a plant of this sort is necessary in the national interest, why do not the Government construct it? If this staff is necessary in order that our national wellbeing may be promoted, why do not the Government set up this plant? We are hoping that other people will take a much more optimistic view than the Falmouth Committee.
There is some constitutional justification for the view expressed by the hon. Member for Barnstaple (Mr. Acland). I think it is a very bad practice to include in Finance Bills a lot of useless lumber. It is clear that one Finance Bill cannot bind another, and that it is not possible for anyone to have a guarantee going on from year to year. No one knows that better than the Chancellor of the Exchequer. If this Clause is carried, all that we shall have is an expression of the opinion of the Committee to the people who may enter this sort of undertaking that this preference ought to be continued for 12 years. That is all the constitutional soundness there is in this proposal. I do not know whether this is the best way of doing it, but it may be desirable or necessary to put on record the view of the Committee at this moment about the proposal. We cannot do anything that will tie future Finance Bills, and any future Chancellor will be absolutely free in this matter.
Hon. Members on this side are deeply disappointed with the nature of the Falmouth Committee's report in so far as this Clause is based on it; we are greatly disappointed that hon. Members have not been given more information on which to base their judgment of this Clause; and we are deeply disappointed that the Government have not had more courage in dealing not only with this vital problem of national interest, but in finding for the coal industry other markets to replace those which modern technical developments are rapidly taking away from it. Valuable years are passing. If one is to form a judgment on the basis of what the Government are now doing, they themselves fear that we may be faced with

a grave national peril in the not-very-fardistant future. If that be their view—and that is the only conclusion one can form from the enormous, unprecedented efforts they are making to rearm the country—it is sad that they are not taking bolder steps and bringing into existence a method of extracting oil from coal which might stand this country in good stead at a time of emergency.

6.39 p.m.

The Secretary for Mines (Captain Crookshank): I will abide by your Ruling. Sir Dennis, and not discuss the Falmouth Committee's report, but perhaps I may be allowed to make one or two references to it. I should like, in the first place, to express the indebtedness which everybody must feel to the members of the committee for the very thorough way in which they investigated the problem before them. The hon. Member for Llanelly (Mr. J. Griffiths) made some complaints on the subject of the evidence which he thought the committee ought to have heard and which it did not hear. If the hon. Member will study the report, particularly the introduction, in which he will see the principles upon which they took evidence, if he will look also at the end of the report where there is a list of those who gave evidence, and that a number of printed and other memoranda were also submitted, and if he will also bear in mind that the committee sat for a very long time in investigating this problem, which has been for so many years of great public importance, I think he will not carry his criticism on that score any further.
This is not a party matter, since two hon. Members opposite who do not seem to like the Falmouth Committee's report have stated that they will support this Clause, which implements the chief recommendation of the committee. As to hon. Members on the Liberal benches it is not surprising that they take what is really a middle course. What the Clause suggests is that there should be a guaranteed preference of 8d. for 12 years, and what hon. Gentlemen on the Liberal benches say is that there ought to be a guaranteed preference of 4d. for six years. They halve both figures. The adoption of such a proposal would not tally with the recommendation of the Falmouth Committee, which was to make it possible for further work to proceed on this very important subject.
The hon. and gallant Member for Carnarvonshire (Major Owen) raised the old discussion, which I do not intend to reopen, as to whether this is a subsidy. It it not a subsidy; it is a non-collection of certain revenue which this Committee decides should not be collected. Home-produced oil, whether it be light oil as in the past or whether it be Diesel oil for road purposes, will receive a measure of preference. The hon. Member for Barnstaple (Mr. Acland) asked whether this is a correct constitutional procedure. It is a fact that in previous Finance Bills provisions have been taken, for example with regard to the Ottawa Duties and Imperial Preference at the time when the right hon. Gentleman the Member for Epping (Mr. Churchill) was Chancellor of the Exchequer, for a period longer than the year with which the Finance Bills were directly concerned. There is not very much in that point. As a justification of this Clause, I would say that, first of all, I think that the country is still without sufficient experience of all the different processes to know for certain whether in a reasonable time they will be economically possible. The Falmouth Committee made that point very clearly. They also made the following point, which I put in defence of a longer period as opposed to shorter one, about the expenditure in the early stages:
One of the difficulties with the processes designed for the production of oil as the primary product is that not only are the large-scale plants expensive to build, but in the earlier stages, one of the main factors which renders them commercially unprofitable is the heavy allowance required to be made under the head of obsolescence. For, as improvements are discovered, it is often impossible to apply them without extensive alterations or reconstruction of plant.
That also is pointed out in another part of the report which deals with Billingham, where the committee state that the company are still not yet in a position to derive the full benefit from the work they have already put in.

Major Owen: Surely, what was stated in 1934 was that the experiment at Billingham had reached such a stage that now they would be able to produce oil from coal commercially. They have had four and-half years in which further to improve these methods, and now we are asked to give them an extra 12 years. When are we to come to and end of—

whatever the hon. and gallant Gentleman may call it—what is, in fact, a subsidy, and a very substantial one, to that particular manufacturing plant at Billing-ham?

Captain Crookshank: The hon. and gallant Member is quite right in saying that in 1934 it was stated that they could, extract oil from coal, but it was not until after the undertaking was given in July, 1933, about the guaranteed preference, that Imperial Chemical Industries decided to start building the plant. I think he is a little wrong in his dates. One of the reasons which I was adducing for this long period of guarantee was the high cost. Everybody who, has gone into this matter—and I know that many hon. Members have made a special study of it—knows that the capital expenditure involved is very high. It is a process which cannot be said to be finally established anywhere. Scientists in this and in other countries are at work upon it and one does not know what modifications in plant may be required in future which would have very important effects.
It is also difficult to foresee at this stage developments which may result in bringing down the cost of production. In those circumstances the Government feel that we cannot afford to lag behind. Our scientists are not unknown in the world and we must give them and others engaged in this work a guarantee of this kind, behind which they can develop the process. The Falmouth Committee came definitely to the conclusion that a guarantee of this kind was the best way of dealing with the matter. While we are not discussing the question in detail at the moment, I would commend to hon. Members paragraphs 259 to 269 inclusive of the report. There, the Falmouth Committee make it clear that in their view a preference of this kind and for this length of time would be the best possible way of development. At the same time I must call attention to the fact that in paragraph 261 the committee agree that:
So far the results of the hydrogenation and synthetic processes are not sufficiently established to justify the spending of large sums of public money in building plants.
Therefore, they favour a continuation of the form of assistance at present given by the guaranteed preference and as they point out in another part of the report—in paragraph 215—they have reason to think that with the assistance of that


preference, private enterprise would be likely to find the capital for a plant of a commercial scale. Having examined the problem in detail and with information at their disposal which we readily acknowledge is not available to hon. Members, the committee arrived at those conclusions. That information was given in confidence to this body which was a sub-committee of the Committee of Imperial Defence. They had to consider a great many aspects of the question which it would not be proper to discuss in terms of evidence. I am sure that hon. Gentlemen all recognise that fact. Still they came to the unanimous decision that the step proposed in this Clause should be taken. The two hon. Gentlemen who spoke from the opposite side are really agreed upon that point. They have complaints about the Falmouth Committee not recommending something else, but they have not said that this is not a good thing to do and therefore it is with some confidence that I ask the Committee to accept the Clause.
When the hon. Member asks me what effect the Clause will have in the future, I cannot say more than that if it is passed it will be a declaration by Parliament that it is desirable for this work to continue. It will be a declaration by Parliament that a guarantee for 12 years should be given, and that that is the right way in which to proceed. It will be a declaration in accordance with the unanimous recommendations of the Falmouth Committee and both the Government and tilt official Opposition are agreed upon it. In those circumstances I submit that it is a declaration which is likely to be of value. I know that hon. Members opposite below the Gangway are inclined to excuse themselves from being associated with that declaration but, taking the matter by and large, if the Government of the day and the official Opposition agree in such a Parliamentary declaration, I think it will be an assurance which will enable industry to develop the processes behind the protection of this preference.

Mr. Bevan: We on this side do not wish to have it quoted against us in the future that we accepted the hon. and gallant Gentleman's statement, and I would ask him to read again paragraph 215 of the report. In his reference to it

he gave the Committee the impression that the Falmouth Committee had been informed that the necessary money would be forthcoming if this proposal were adopted. May I read the paragraph? It says:
One witness appeared to be confident that if a guarantee for 12 years were given, private enterprise would find the capital for a plant of a commercial scale.
I would point out that even if this Clause is passed, there is no contractual guarantee. The paragraph continues:
On the other hand, another witness who at first suggested that, in addition to a guaranteed preference, the Government should find or guarantee three-fourths of the capital for a commercial scale plant, finally wrote to the Committee and gave it as his considered view that the provision of capital for such a venture was not likely to attract outside investors.

Captain Crookshank: I take no exception to the hon. Member reading out any part of the report. All I said was that the Falmouth Committee had had from one witness the impression that it might be possible with this guarantee to find the money from private enterprise. It is also true that in another paragraph, to which I also referred, they said that it was not suitable for public money to be invested in this concern at this stage.

6.53 p.m.

Mr. Dunn: With some of the comments made by the Secretary for Mines I find myself, to a certain extent, in agreement, but it must not be taken that we on this side are giving our whole-hearted support to the Falmouth Report. All I would say about that report is that we do not accept it, nor I think does anybody familiar with the question accept it, as the final word on this very important subject. We regard it as a restricted contribution to the solution of the problem, and the general view which we hold is that the report was more or less sabotaged and torpedoed by the oil industry in this country. That is as far as I want to go in that connection. I desire, however, to put the question of this Clause a little further than it has been put up to now. The Debate has centred largely round the question of the extraction of oil from coal and the report of the Falmouth Committee. I would like to ask the Chancellor of the Exchequer to look very closely into the question of power alcohol which is covered by this Clause.

The Chairman: I do not think that the question of power alcohol arises on this Amendment.

Mr. Dunn: I accept your Ruling, Sir Dennis, and will defer my remarks on that subject until the appropriate occasion.

Colonel Sandeman Allen: In view of the statement by the Minister that this Clause has been put down for the purpose of encouraging the manufacture of oil from coal and not for the purpose of keeping the Petrol Duty at 9d. for 12 years, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

6.56 p.m.

Mr. Graham White: I beg to move in page 2, line 27, to leave out "eight-pence," and to insert "fourpence."
This Amendment is the natural sequel to the Amendment which was last under consideration. The previous Amendment dealt with the question of the time and this relates to the question of the amount of the preference and the original proposal was that if the rate was increased, the time was to be diminished. My hon. and gallant Friend the Member for Carnarvon (Major Owen), in supporting the previous Amendment, laid before the Committee certain arguments which were relevant to that Amendment and are also relevant to this Amendment. I do not propose to ask the Committee to listen to a restatement of those arguments.

6.57 p.m.

Mr. Acland: On this Amendment I wish to address a few words to hon. Members on this side above the Gangway. I understand that they are no more willing to support this reduction than they were willing to support us on the previous Amendment. May I remind them that, according to their own policy, they will shortly desire to take over the whole of this industry and pay compensation for it? If this preference were not guaranteed for 12 years, or if it were reduced, they would of course pay compensation at the appropriate rate, and the industry being one which does not make any particular profits, the compensation payable would not be particularly large. But if there is a guaranteed preference for 12 years, or, at any rate, something which gives the industry the right to say that it has been told by Parliament that the preference is

likely to continue for 12 years, and if the rate is fixed at 8d. rather than 4d. then, when hon. Members above the Gangway come to carry out their policy they will have to compensate the owners of this big monopoly at the value which the Stock Exchange will attach to the industry, with a 12 years guarantee of 8d.
I ask hon. Members to consider whether their refusal to support these Amendments is not contrary to the general line of their policy. I wonder whether it is the connection between the party above the Gangway and anything which concerns the coal industry which has resulted in their adoption of a new line of policy in this case. I suggest that it is a line of policy which they would never dream of adopting if we were discussing, say, a guaranteed preference of ¾d. a lb. on beef. They would never have dreamed of supporting a 12 years' guarantee in that case, and, if it had been moved at the rate of ¾d. a lb. guaranteed for 12 years, having voted against the 12 years, they would then move that it should be reduced from ¾d. to ⅜d.

7.1 p.m.

Mr. T. Smith: I may, perhaps, remind the hon. Member that we could not always rely on the Liberal party when we were in power. There were times when they were not quite consistent. How many times did we have criticisms from that party as to what ought and what ought not to be done with regard to the coal industry? Perhaps two or three of the most damaging critics in that party are now Ministers of the Crown. I remember the Minister of Labour being very scathing with regard to certain things, and the Secretary for War was not altogether uncritical of the Labour Government.

Sir J. Simon: That was before the Popular Front.

Mr. Smith: If there is one Minister who ought not to mention the Popular Front it is the right hon. Gentleman, because he has been rather acrobatic in his political career. If there is one Member of the Government who is swallowing the principles that he preached in days gone by it is the right hon. Gentleman, and I think he will agree with me.

The Chairman: If the hon. Member thinks he has had a sufficient hit back at the Liberal party, perhaps he will come back to the Amendment.

Mr. Smith: The position of the Labour party on this question of preference can be easily stated. I have said many times that I believe there is a future for extracting oil from coal when we are prepared to get down to certain basic things, and that one of the reasons why we cannot induce private capital to come into the industry is that so many investors in the past have been led up the garden.

The Chairman: I think the hon. Member is now getting on to a wide discussion which we cannot have here. The Amendment is simply a question, if my arithmetic is right, whether for eight years out of the 12 the 8d. should be reduced to 4d.

Mr. Smith: You are quite right, Sir Dennis, and no one is disputing your Ruling. We are not supporting the 8d. because we believe that it will solve the problem of oil from coal. When the Secretary for Mines tells us to read the Falmouth Report, he must keep in mind that we are not altogether satisfied. We are accepting what is suggested in the Clause because the mining industry is in such a tragic plight and we believe that, if the preference is given for 12 years, it will encourage further plans for extracting oil from coal. We are not complaining of the advice that has been given from below the Gangway but on this occasion we have to have some regard for expediency. The mining industry is far from being in a healthy state.

7.6 p.m.

Captain Crookshank: I do not think the Committee will require me to say more than that we cannot accept the Amendment. I have listened with interest to the lecture that has been addressed to the party above the Gangway and to their recollections of previous political history. But I should like to make one correction in what the hon. Member said. He spoke of this being a great concession to one of the greatest monopolies that there are, but the guarantee of this preference covers a variety of interests. It covers, for instance, the shale oil industry and many other processes.

7.7 p.m.

Mr. Mathers: I am glad that at last mention has been made of the Scottish shale oil industry. The prospect of a continuance of the 8d. preference for oil produced from shale affords an opportunity to that industry to develop in a

way which I am sure will be beneficial to the area that I represent together with the Secretary of State for Scotland in West Lothian and Midlothian. To reduce the preference to 4d. would not only prevent that development which is now going on but would, I am informed by the trade union section, destroy the industry and bring it back to the very serious position in which it found itself immediately after the War. I hope the Committee will give unanimous approval to the continuance of the preference for the period mentioned in the Bill.

Amendment negatived.

Clause ordered to stand part of the Bill.

CLAUSE 3.—(Excise duty on power methylated spirits.)

7.9 P.m.

Mr. H. G. Williams: I beg to move, in page 4, line 3, to leave out "ninepence," and to insert "fourpence halfpenny."
My hon. Friends and I tabled this Amendment on the Report stage of the Budget Resolutions. We were not in any way inspired by the nature of the particular commodity but we felt, having always been convinced of the desirability of protecting production in this country, that it was wrong to deprive an industry entirely of protection. Our only opponent of any substance was the hon. Member for South Bradford (Mr. Holdsworth), who claimed that it was legitimate to impose this duty at 9d. on the ground that the production of power alcohol was in fact subsidised through the effect of the Excise rebate. Is it desirable that, since we are a protectionist country, we should encourage by means of protection the production of alcohol for the use of power purposes. It seems to me that, if our policy is to encourage the manufacturer of things that we can make here, clearly we ought to encourage the production of power alcohol. Under the last Clause we have committed ourselves for 12 years to encourage the production of petrol, though we all know that the degree of protection that it is to enjoy is enormous. It is 8d. in respect of something which on importation is worth a fraction over 3d. It is the greatest degree of protection given to anything. That enormous degree of protection is supported by hon. Members opposite on the ground that it assists the coal-mining industry, which is passing through a difficult time.
They are all agreed that the production of petrol ought to be protected, but it is said that power alcohol is different. It is made from imported raw material, and that is used as an argument for not protecting this commodity. It seems to me a dangerous argument to use because 90 per cent. of our protection relates to the production of goods made from imported raw material. If that argument is accepted we ought at once to abolish the duty on all electrical goods, because they are made of imported copper; we ought to abolish all protective duties on cotton goods, because raw cotton is imported; we ought to abolish duties on woollen goods, because the bulk of the wool is imported, and we ought to abolish all protective duties on anything made directly or indirectly from wood. So that I hope no one will advance that argument. It may be perfectly sound to argue that, where an article is made from an imported raw material, it should not enjoy as much protection as when it is made from indigenous material, but there can be no rhyme, reason or sense in anyone who believes in Protection saying that a thing should not be protected because it is made from an imported raw material. It is interesting to speculate why there is so much support in certain quarters for the Chancellor's proposal as against my proposal to maintain a degree of protection for the industry. I have here a publication known as the Petroleum Press Service containing an article headed "Britain's Alcohol Duty." It concludes with these words:
At all events it is to be hoped that the Government will not be induced to swerve from their purpose by the vociferous objections of vested interests.
"Vested interests" are always somebody else's interests; that is all that the term means. I wonder who is the author of that impressive sentence. I find that the Petroleum Press Service is published in three languages, English, French, and German, by the Petroleum Press Bureau, whose editor is Dr. Oskar Tokayer. I have nothing against that gentleman. I have no doubt he is a highly respectable gentleman and a competent journalist. He is, in fact, I am told—I hope I am not making a misstatement about him—a Hungarian gentleman, but it is strange when this country is urged by a Hungarian gentleman—acting for whom? The petroleum interests of the world,

very largely foreign petroleum interests—not to be induced
to swerve from their purpose by the vociferous objections of vested interests.
That is really almost a classical phrase, particularly when the same publication, when commenting on Clause i of this Bill, takes an entirely different view and denounces the Chancellor for having raised the duty on petrol by a penny; the vested interests are then the other way round. These people are not in the least degree high minded. Their sole object is that they do not wish to see built up in this country a motor fuel which is not petrol. I think, from the point of view of national security, it is a good thing that we should know how to produce an alcohol, mixed with other fuels, suitable for the propulsion of motor cars, even though at the moment it is; produced mainly from imported raw materials. In time of emergency it could be produced, more expensively, I agree, very largely from indigenous material. I am inclined to think that ultimately it may be produced from vegetable growths which at the moment we regard as waste, because alcohol is one of the few things in this life which, whether we like it or not, you cannot avoid, because it is associated with almost everything that grows. Therefore, there is the possibility that ultimately we may build up a great alcohol industry in this country for industrial purposes, based on materials different from those which have been more freely used in the past.
It is alleged against the present absence of duty that one company—and until these Debates began I did not know that this company was largely associated with this mixture, because I think the bulk of its sales are in the North of England, and I have not in the past patronised its pumps—has made a lot of money. Therefore, the new theory is that if you find anybody making a lot of money, you must entirely take away any protection which they enjoy.

Mr. Dalton: That is what you do with-the ships in Spain.

Mr. Williams: If people like to have ships going from Marseilles to Valencia, and if those ships were formerly Greek and, after signing a few papers, shoved up the British flag, that does not have a great deal of bearing on this subject of motor alcohol. It is always terrible to


become obsessed with one subject. [HON. MEMBERS: "Hear, hear."] I rejoice at those cheers, because they confirm my opinion that hon. Members opposite think this has something to do with ships in Spanish waters, but it has not. If this duty is raised to 9d. from nothing, I imagine that it will inflict a very grave blow at the production of this industrial material in this country, because if they are deprived of their protection, the chances are that the production will no longer continue. It is the case that alcohol is more costly to produce than petrol, and with a comparable duty I think the production in all probability might cease entirely or almost certainly be very heavily reduced.
I cannot understand anyone, unless they are Free Traders, saying that this industry should have no protection at all. Arguing on the basis that we are for the time being a protectionist country, I cannot understand anyone contending that it should have no protection, because if they say that, they are acting merely in the interests of the foreign oil interests. If we accept the principle that there should be a measure of protection, we come down to the practical detail of how much. When, somewhere about 1922, an Amendment was made to the Finance Bill to make possible the use of alcohol industrially, and certain restrictions were imposed upon those who produced it, restrictions which are, I understand, expensive to administer, there was allowed to the producer of industrial alcohol a rebate which was intended to be enough, and not more than enough, to compensate the distiller for the extra expense to which he was put. Now if the rebate of Rd. per gallon of pure spirit—I think that is the figure—is in fact to-day, because of the larger scale of production, more than is wanted, that is a matter of detail to be argued out, and we should apply our minds to the problem of how much protection is needed.
I have put down 4½d., not because I am fully acquainted with the details, because I am not; I do not know whether 4½d. is precisely the right amount, but I think, again on the assumption that the 8¾d. does not represent a subsidy, but is merely a refund of expenses imposed on the distillers by the Excise authorities and that when they receive 8¾d. they are in the same position as if they had received

nothing and manufactured without restriction—on that basis, I think 4½d. is a fair amount of protection. If, on the other hand, it is the case that actually there is an element of subsidy in the 8¾d., on the ground that there is a larger scale of production now taking place, if it is the fact that the distillers can carry out these restrictions at less than it may be argued that the protection of 4½d. is more than sufficient, but that is a matter for technical considerations, with which I do not profess to be acquainted, and I imagine that the only person in a position to advise us on that point is the Chancellor himself.
I hope this problem will be approached in this Committee to-day without that curious prejudice which I have seen in communications outside. I have every reason to believe that the oil interests have been exceedingly busy. I got a most interesting free lunch the other day, when a friend of mine, a great friend whom I have known for years, asked me to lunch. I knew that he had some connection with the oil industry. There was another gentleman there, who was exceedingly well informed on this subject; we had a very good lunch, and they tried to persuade me how misguided I was, but they were not successful. I do not blame them. It was a perfectly legitimate form of friendly bribery and corruption of the kind to which we are all subjected from time to time, but when we accept such bribery and corruption, we must be very sure we still keep our wits about us. I have observed letters written to the Press containing precisely the same kind of misleading material that I find in this document. I do not blame the oil interests for being busy with propaganda to save themselves. They do not want to see the total amount of petroleum imported into this country diminished owing to the fact that we are producing in this country an alternative spirit. Naturally they do not want that, and they are doing something which is quite legitimate in seeking to sell as much imported petrol as they can.
Unfortunately, the British Empire is poor in petroleum, the bulk of our supplies of which must come from foreign sources, and I rejoice that on the previous Clause the Labour party did all they could to support the principle of reducing to some extent our dependence upon


foreign sources. I hope the coal interests will not take a narrow view on this matter. There is plenty of room for them and for power alcohol. After all, in any event we shall have to import the bulk of our requirements for a very long time to come, and in the most favourable circumstances I cannot imagine coal and Scottish shale being able to provide us with more than a tenth of our requirements, so that it would be unfortunate if the coal interests in this House, because they regard power alcohol as a competitor to some extent, were not prepared to support those of us who think that this production should be maintained in this country and, within limits, increased.
I fully realise the problem of the Chancellor. These duties, now producing £58,000,000 or thereabouts, represent a very important prop to the Treasury in these days, and the right hon. Gentleman is right, if he sees that particular production, entirely exempt from taxation, making great inroads in his revenue, in saying, "I cannot afford, from the point of view of the revenue, to allow this to go scot-free," but in protecting his revenue he ought not to destroy the production, and my plea with him to-day is this: He is right to impose on the production of this alcohol a measure of duty in order that the revenue will not lose unduly. On the other hand, he should not impose it at the full rate, because in that way he will destroy the production in this country.

7.28 p.m.

Mr. Amery: I think it is a matter of general agreement in this Committee that in so far as we can liberate ourselves from complete dependence on external sources of so important a fuel as petrol, we ought to do so; and we did accept that principle just now with regard to the production of substitutes from our indigenous mineral resources. It seems no less important to liberate ourselves, in so far as we can do so, by the use of vegetable resources, whether indigenous or imported, and I might mention that even to the extent that we rely on imported vegetable produce for the creation of this power alcohol, we are drawing upon a much wider range of production and one of which we have much larger facilities within our own Empire, than in dependence upon oil which is largely produced in foreign countries. In any case we are dealing with this simple position, that a

new industry, which after many experiments and failures seems to have arrived at the right technical method, has in the last year or two been making marked strides. It promises to give steadily increasing employment and, indeed, to hold out some hope of ultimately displacing foreign petrol to the extent of something like 15 per cent. That is a clear advantage, both from the specific point of view of our dependence on foreign sources for this important fuel and, more generally, from the point of view that we are developing a British industry, which, as my hon. Friend pointed out, does not differ from many other industries in relying to a substantial extent on imported raw materials.
The suggestion is that that progress should be stopped or severely checked in what is called the interests of the revenue. The whole point that I wish to make to the Committee is that that is an entirely false view to take of the interests of the revenue. The answer to that point of view was given very effectively a few minutes ago by my hon. and gallant Friend the Minister for Mines, when he said that preference was a question not of loss of revenue or subsidy, but of non-collection of a duty. It seems to me that it is in the interests of the revenue not to collect a duty if the collecting of that duty interferes with the development of national production and, therefore, with the development of all the sources of revenue upon which, in the long-run, we have to rely. Surely nothing could be more short-sighted than, for the sake of the immediate collection of revenue in respect of one particular tax, to check that national production upon which the revenue from all our taxation depends. My right hon. Friend who was representing the Treasury when we first brought this matter up and has now been translated to a higher sphere, used certain figures of the extent of loss which he anticipated—I think greatly exaggerated, and almost fantastic figures.
Even if they were true, the figures of the loss of revenue on that particular tax would be the measure of the development and progress of the industry and, therefore, of the revenue which the industry would yield to Income Tax, Surtax, National Defence Contribution and wages. Just like any other industry, it would yield a far larger amount in the long run than anything


that the Chancellor would lose in respect of that particular tax. I was glad to note that at the end of the Debate my right hon. Friend was so impressed by the strength of the arguments on this issue that he promised on behalf of the Chancellor that the matter would receive most careful consideration. It is a matter to-day, in principle at any rate, that vitally affects the whole future of our revenue. There was a time when the total burden of taxation was insignificant as compared with the national wealth, and when the natural consideration that influenced any Chancellor of the Exchequer was the convenience of collection and the completeness of the collection of any particular tax at issue. That is not the point we have to consider to-day. We are confronted with the fact that we have a total national expenditure of £1,000,000,000, or more if we include municipal and local expenditure. That vast expenditure, representing fully one-quarter of the total national production, shows no signs of being likely to diminish in future, whereas the production on which it is based may be menaced by many circumstances in our own economic situation and that of the world outside.
Surely, in these conditions, the one thing on which the Chancellor of the Exchequer must keep his eye is strengthening the national production. No tax should be considered by him, however convenient its collection, if in any way it is likely to discourage national production. No tax should be rejected by him, however inconvenient or however small the revenue which it may collect, if its incidence contributed to stimulate the encouragement of national production. That is, after all, the principle we decided just now on Clause 2, and I hope that the Chancellor will be consistent to the extent of adopting the same principle with regard to the present Clause. I entirely agree with my hon. Friend that in so far as he can conveniently collect more revenue without checking further the development of this industry, there is no objection, but the Chancellor should maintain a preference to the amount that is essential to what ought to be his major purpose—the encouragement of production. Subject to that, if hecanincidentally draw some trifle of revenue from this industry, by all means let him do it, but let it not be done at the sacrifice of what

ought to be the major object of every Chancellor to-day, namely, the promotion, strengthening and developing of our national industries.

7.39 P.m.

Mr. L. Jones: Every speech delivered this afternoon seemed to deplore the need for taxation, and the two speeches that we have heard on this Amendment have adopted the same trend of thought. I appreciate that the Chancellor's main concern in framing his Budget is to find the revenue to meet the expenditure of the country, and I, for one, support him in the proposal contained in this Clause for that reason in the first place. In the second place, I think that the fact that power alcohol has been free from this duty for so many years has given it considerable preference in the competitive market over other fuels. The hon. Member for South Croydon (Mr. H. G. Williams) suggested that this was a new industry which the Chancellor should encourage. Both the speeches we have heard contained a plaintive appeal to the Chancellor not to discourage a new type of industry. In 1931–32 there were produced in this country 18,331 gallons of power alcohol. In 1938–39 it is estimated that the production will be 9,333,000 gallons. That figure is arrived at from the amount which the Chancellor hopes to get from this duty.
I suggest that it is a little absurd to suggest that this industry requires very much encouragement in view of the remarkable progress it has made during the last few years. The hon. Member for South Croydon suggested that this was a good opening for a home industry and that it might do good to certain other supplies of raw material produced at home. It is remarkable that for the last six or seven years the bulk of the raw materials used by this industry has been imported, most of it from foreign sources. The suggestion that the industry will do wonders for British raw materials, therefore, is not borne out by the facts and experience of the last few years.

Mr. H. G. Williams: Will my hon. Friend agree that steel made in South Wales from Spanish ore should pay the same duty as imported steel?

Mr. Jones: I should be glad to discuss steel with my hon. Friend at another time. For the time being, I want to keep to the subject on which I am


addressing the Committee. In 1936–37 only 7.9 per cent. of the raw materials used in the manufacture of power alcohol in this country was home-grown. Very little of the remainder was from Empire sources. The hon. Member for South Croydon asked for the continuance of this protection to power alcohol. It is obvious that this duty which the Chancellor has included in the Finance Bill is essentially a revenue-raising proposal. The hon. Member for South Croydon seems to have forgotten that all petrol made in this country from imported crude oil pays the full rate of duty. Why should power alcohol have an advantage over other types of petrol? The right hon. Gentleman the Member for Sparkbrook (Mr. Amery) mentioned that some of the raw materials were from foreign sources. As a matter of fact, a large tonnage of crude oil imported for manufacturing petrol in this country comes from Empire sources. In particular, I would mention Trinidad.
It is suggested by the hon. Member for South Croydon that some great blow will be given to this industry if the Chancellor insists on carrying through his proposal. In view of the fact that only 12 or 15 per cent. of alcohol is used in this petrol mixture, the effect of the proposal will be to increase the cost of production of power alcohol by one penny per gallon. It is still open to the power alcohol people to develop or to produce their alcohol for industrial purposes, and they do so at the present time in huge quantities, because alcohol used for industrial purposes is free from duty. References have been made also to the fact that certain preferences have been given to petrol manufactured from coal and shale. In connection with that the hon. Member for South Croydon thought it was desirable for this country to do what it could in the direction of self-sufficiency in petrol supplies. He was careful to avoid reference to the fact that in wartime it may be essential for us to have it for commercial aviation or for the Royal Air Force. I understand that his tune has been changed entirely since the discussion on this subject a few weeks ago. Power alcohol is not used for commercial aviation and blended petrol is not acceptable by the Royal Air Force. When we talk of petrol made from coal and shale and the preference which is given by the Chancellor in his proposals, it must be borne in mind that that was

not intended to assist petrol as petrol, but was intended to assist the coal and shale industry. The power alcohol industry, in so far as it uses molasses, is assisted because that raw material is subsidised in the beet sugar industry to the extent of £2,000,000 per year.
There is one other point, which I wish particularly to bring to the notice of Members representing mining constituencies. In the First Schedule there is a stipulation that when home production of motor fuel reaches 20 per cent. of home consumption figure the guaranteed preference to oil from coal will decrease by 1d. per gallon, with further decreases for every 5 per cent. increase in production. This must be a matter of some concern to those who are interested in the production of oil from coal. This power alcohol is blended with petrol to the extent of 15 per cent. During the last few years there has been a considerable increase in the production and consumption of power alcohol. If the tax which the Chancellor has proposed is withdrawn there will be a still further considerable increase in the production of power alcohol, and very shortly we may find that it amounts to 15 per cent. of the petrol consumed in this country. If power alcohol is responsible for 15 per cent. and the maximum set up in the Schedule is 20 per cent., there will only be 5 per cent. left for oil from coal—if it is to retain the preference—whereas at present there is produced from coal, shale and other home products as much as 7 per cent. Therefore, those interested in the production of petrol from coal and shale will have to be very wary of the proposal in this Amendment.
The hon. Member for South Croydon noted that a number of references had been made to the Excise privilege which the power alcohol industry was receiving at the present time, and suggested that the 8¾d. was perhaps but little in excess of the increased expenditure which the producers had to incur. A good number of us think that the Chancellor might easily have reduced the 8¾d. When the 8¾d. was first agreed upon this was a small industry, and it is obvious that the cost of the process which it was essential for them to carry out to meet the demands of the Excise authorities must have been considerably more, per gallon, than


it is, per gallon, at the present time now that the output has been increased so largely, and so I suggest that the industry already has a considerable preference on that Excise allowance, and I appeal to the Committee not to accept the Amendment. It would be absurd to say that this preference should be given to power alcohol if it reacts to the detriment of the production of oil from coal.

7.48 p.m.

Major Owen: I rise to support what my hon. Friend the Member for West Swansea (Mr. L. Jones) has said upon this Amendment, and I am in the happy position that on this occasion, at least, I am able to support the Chancellor of the Exchequer in placing this duty upon power alcohol. As the hon. Member for West Swansea has already said, there has been an enormous increase in its production within the last few years. In 1931 the production was only 18,381 gallons, but last year it had risen to 6,369,758 gallons, while this year the Chancellor estimates that 9,330,000 gallons will be produced. During those years the producers of this alcohol have had a special opportunity to make exceptional profits. There have been no Custom duties imposed on it, no tax of any kind, and, as other speakers have said, it has had the benefit of the 8¾d. Excise allowance. With such help it has made enormous strides. The hon. Member for South Croydon (Mr. H. G. Williams) said of power alcohol that it is a motor fuel which is not petrol. I think he is very much mistaken. He must know perfectly well that power alcohol is used only in conjunction with petrol, and at the outside there cannot be more than 15 per cent. of power alcohol added to petrol if the mixture is to be of any value as a motor fuel. Therefore, we have still to depend to a very large extent upon imported petrol. As he is in favour of Protection and Preference, why is it that he and the other supporters of this Amendment have not put down an Amendment to secure this preference of 8¾d. for the crude oil which is brought into this country from our own Empire and refined here? Why have they not proposed that there should be a preference for oil produced in our colony of Trinidad?

Mr. H. G. Williams: Some years ago I tried to persuade some of the oil interests

that it would be a good thing to refine in this country; but they do not want to incur great capital expenditure, and therefore the whole of the vested oil interests are overwhelmingly opposed to it. I should like to make them do it, but, unfortunately, I cannot.

Major Owen: The hon. Member says that he is opposing the great oil interests.

Mr. Williams: Certainly.

Major Owen: If he thinks it is of benefit to the country to oppose them on that issue why does he not oppose them on the other?

Mr. Williams: One battle at a time.

Major Owen: Apparently he gives way to the big oil interests in one instance and in the other instance he dares them to do their worst. That is typical of the inconsistent attitude of those Members who are constantly asking for Protection for everything.
There is one other aspect of this matter which has not been put forward. It was argued when this matter was first raised that if we produced molasses or power alcohol in this country we should be making ourselves more secure in time of war, but what is the position? Out of 10,000,000 cwts. of molasses which we imported into this country last year only about one-fifth came from our own Colonies. The 10,000,000 cwts. of molasses would require two and half times the amount of shipping tonnage which would be needed for the quantity of petrol. How are we going to spare that tonnage in time of war? It has been claimed that by manufacturing power alcohol here we should have a source of supply within our own country during war, but surely the right hon. Member for Sparkbrook (Mr. Amery) and the hon. Member for South Croydon know perfectly well that we cannot afford to use potatoes to produce alcohol in time of war, because they would be needed for food. The whole thing is really an attempt to try to deceive this Committee into thinking that the power alcohol industry is a poor struggling industry which can hardly make both ends meet, but by the admixture of 15 per cent. of power alcohol with 85 per cent. of petrol it has been able to make enormous profits, yet the moment the Chancellor says, "I should like a little of those profits" it begins to squeal. I have not the


slightest sympathy with this Amendment, and I hope the Committee will reject it.

7.55 p.m.

Mr. Gledhill: I desire to support the Amendment and I do so following upon representations submitted to me by a large firm in my constituency. This firm have just had plans passed for the erection of a large power alcohol production plant and they inform me that the sudden imposition of this tax means that those plans will have to be scrapped.

Mr. J. Griffiths: What is the name of the firm?

Mr. Gledhill: The Trent Oil Products, Limited. The plans had to be passed by the Department of Customs and Excise and were only passed shortly before this imposition was introduced. The firm told me that they have made an offer to the Government to take over the plant, because if they went on with it themselves they would be mulcted in a severe loss. They are not prepared to go on with their plans for the purpose they have in mind, which was the mixing of power alcohol with petrol to produce a spirit of high octane value, the ethyl petrol of the well known imported brands. I wish to put that point to the Chancellor of the Exchequer and ask him to give it his further consideration, so that this firm may not be mulcted in a heavy loss. I submit that they are entitled to the same protection as we have given to those dealt with under Clause 2.

7.58 p.m.

Mr. Dunn: I rise to oppose this Amendment, because this proposal not to treat power alcohol on the same lines as ordinary petrol is dealt with for purposes of taxation has been viewed with very grave concern, especially after a study of the reports of the Petroleum Storage and Finance Corporation. I cannot understand the position taken up by the hon. Member for South Croydon (Mr. H. G. Williams). He was good enough to tell us that he took lunch last week with the oil companies, but he was not good enough to tell us that the week before he may have been taking lunch with the Petroleum Storage and Finance Corporation. Whether that was so or not I do not know, but it is fairly obvious that so far as the Member for South Croydon is concerned—and I am glad he is back in the Committee again—on this occasion he has

a leg in each camp. I have been in the House only since 1935, but I have noticed that every interest of this kind seems to have seized upon the hon. Member for South Croydon. I remember on the Moneylenders' Bill—

Mr. H. G. Williams: The hon. Member is under a misapprehension. I am very glad to say that I have never had recourse to moneylenders.

Mr. J. Griffiths: Perhaps they have had recourse to you.

Mr. Williams: No.

Mr. Dunn: Those people have been successful in spoiling the Hire Purchase Bill, to a very large degree, and they had as their main advocate the hon. Member for South Croydon (Mr. H. G. Williams).

Mr. Williams: On a point of Order. I do not mind having my leg pulled reasonably, but when the hon. Member makes a statement which he knows must be completely untrue it is time for me to say something. The Hire Purchase Bill was completely altered by the original proposer dropping 18 Clauses and substituting 12 new ones, as a result of negotiations in which I played no part whatever.

Hon. Members: Hear, hear.

Mr. Dunn: Some hon. Members said, "Hear, hear" to that, but the hon. Member for South Croydon will remember that he played an important part at every stage of the discussion of that Bill. We find him again now the chief advocate of the poor people who manufacture power alcohol.

Mr. Gledhill: Why not?

Mr. Dunn: The hon. Member might have told us a little more about the poverty of the people who were responsible in no small measure for financing, and probably assisting in the erection of the io important distilling companies in this country, and who, last year, paid a dividend of no less than 344 per cent.; and he would have the Committee believe that it is a wicked shame to ask corporations of this kind to contribute to the requirements of the country. It seems a scandal and a shame for good democrats and Tories, and people who are prepared to defend the country under all conditions,


to be those who are begging the Chancellor of the Exchequer to allow to companies of that kind rebates in respect of petrol tax. The hon. Member pointed out that there was an Excise rebate of 8¾d. a gallon, and he said that the only advantage the companies would get would be, I think he said, equal to 1d. per gallon, after they had dealt with the registration process.

Mr. H. G. Williams: I must really protest. The hon. Member has constantly made reference to me and, without any validity, put into my mouth words which I have not used. I never made any reference to a rebate. I must ask him to conduct the Debate in the normal way and without making false quotations.

Mr. Dunn: That is the hon. Member's interpretation.

Mr. Williams: I must ask for your protection, Captain Bourne. The hon. Member quotes statements which he alleges I made when I have made no statements of that kind. [An HON. MEMBER: "See it in the OFFICIAL REPORT."] I never made any statements about 1d. per gallon in my speech.

Mr. Dunn: If I have misrepresented the hon. Member, I apologise.

Mr. Williams: Thank you.

Mr. Dunn: I understood the hon. Member, when he was dealing with this Excise Duty, to make reference to the fact that the only advantage that companies of this kind really got out of it was equal to 1d. per gallon, but if that is not his interpretation—

Mr. Williams: I have tried to explain to the hon. Member, but perhaps he did not understand. The Excise rebate is 1d. That is made with the Excise authorities, and the people are subject to conditions as to the conduct of their production. Certain limitations have imposed upon them heavy expenses. You find exactly the same thing in the match industry, which is liable to a revenue duty. The 8¾d. was originally calculated as equal to the extra expense incurred. Therefore it is not a rebate, an advantage or a subsidy, if the sum was correctly calculated. The hon. Member does not seem to appreciate the significance of the rebate. At no stage did I make a reference to 1d.

Mr. Dunn: Let me pass on to the real point which I wanted to make. The Excise rebate is 8¾d. and the exemption from tax, up to the time when the Chancellor proposed this tax, was 8d. per gallon, making in all is. 4¾d. per gallon, to companies of this kind, who made enormous profits last year equal to 344 per cent. Then they have the cheek and audacity to come to this House and ask to be allowed a special privilege. It is perfectly monstrous that the claim should come forward and I am glad that the Chancellor of the Exchequer has had the courage, in this period of national emergency, to insist upon a reasonable contribution from petrol companies as from other people.
I would ask the Chancellor of the Exchequer to take the country into his confidence when he replies on this Debate, and to tell us exactly the ramifications of those people, so that the country may know exactly where it stands. If he will do that, I am certain that there will be a better understanding of the position than there is to-day. Only one wish I would express, because most of what I intended to say has been covered by a previous speaker; I am satisfied that if the Excise rebate on petrol taxation amounting to is. 4¾d. per gallon had found its way into the coal-mining industry, which has got into serious financial difficulties—there is no 344 per cent. dividend being paid in it—and is waning very rapidly, there being fewer men employed to-day than there were in 1936—

The Deputy-Chairman: Coal does not come into the question of power alcohol.

Mr. Dunn: I was making a comparison to show that if the same rebate had been passed on to the coal industry as has been passed on to the industry to which we have been referring, it would have meant a step forward in the production of oil from coal compared with the position at the present time.

8.9 p.m.

Sir Adrian Baillie: I should have thought that the replies given by the Chancellor of the Exchequer and the Financial Secretary to the Treasury when this matter was raised in the Budget Debate, would be sufficient to deter further attempts on the same lines. My hon. Friend the Member for South Croydon (Mr. H. G. Williams) made, as the gravamen of his advocacy of the


Amendment, that the duties were protective. He will recollect that the duties were never intended at the outset to be protective but to be revenue duties.

Mr. H. G. Williams: Which duties?

Sir A. Baillie: The duties on petrol and hydrocarbon oils. My hon. Friend claims that if his Amendment is not carried, the protection which the power alcohol business has received will cease and the business not be possible. As far as these duties are primarily revenue duties, it is apparent that the rapid increase in consumption of this power alcohol, free from all duty or tax, must gravely endanger the revenue received from the petrol tax. It has been mentioned on more than one occasion that the company most concerned is sheltering behind the accidental and unfair taxation, and has made vast profits because of that shelter. I cannot believe that the taxation which is presently to be applied to that concern, if this Clause stands part of the Bill, will penalise them so vitally as to affect their further development.
Another point made by my hon. Friend was that he hoped no one would bring forward the argument that power alcohol was produced from imported raw material. Well, I will make that point, but not for the reasons which he expected. Power alcohol, being produced from an imported raw material, is not entitled thereby to any more favourable treatment than petrol produced from imported crude oil. That should be obvious in logic. If the Chancellor of the Exchequer were to desire or were to be persuaded that the £44,000,000 which he hopes to get from the tax would be more equitably raised from other sources, that would be one thing; but so long as this tax is essential to his revenue, not only all petrol, wherever it is found, but all substitutes for petrol, must be taxed equally. I do not count the petrol which we get here from oil or shale because those sources are to a large extent non-expandable, or hydrogenated petrol, the preference on which is given merely for the benefit of research work.
Surely it is clear that the policy of the Government in this matter is not to attempt to promote self-sufficiency in petrol but to give reasonable assistance to the coal and oil industries, on lines recommended by the Falmouth Committee. I am interested in these matters;

I have been politically interested for a long while. In the last Parliament I represented a constituency which was not only a coal-mining but a shale-mining constituency. Reference has already been made on a previous Clause to the benefit which this tax has conferred upon the shale-mining industry in West Lothian and Midlothian. I fought this tax, but to-day I hope that nothing will be done to whittle down the value of it to the shale-mining industry and to the coal- and oil-mining industries at present being developed in this country. It is because I fear that if the power alcohol production of this country were to continue to receive these benefits it would weaken the benefit to our coal-and oil-mining industries, that I hope that the Chancellor will not swerve from his equitable purpose because of the claims which have been put forward—if I may allude to the hon. Member for South Croydon (Mr. H. G. Williams) again—and by the vociferous objections of vested interests.

8.15 p.m.

Mr. Radford: A number of references have been made during this discussion to one company which manufactures an alcohol blend of motor spirit. The company in question is one of which I am a director, and although it was not my original intention to take part in this Debate, as I had intervened already at two different stages, once on the Report stage of the Budget Resolutions and once on the Second Reading of the Bill, I feel I must reply to some of the things which have been said this evening. On both occasions I made it clear that I was not a disinterested party, but I felt that, where one is interested and reveals one's interest, the fact that one has knowledge which one can contribute makes it necessary to take part in the Debate. Since when it became a crime for a company to make a good profit, I do not know. I must confess that, on the Second Reading of the Bill, I was astounded when my right hon. Friend the Chancellor of the Exchequer had no reply at all which he could vouchsafe to my speech except—I do not want to be unfair or offensive—what I felt was rather a sneering reference to the fact that the company with which I was connected had made very handsome profits in the past year, which he described as being more than no per cent. on the company's share capital.

Sir J. Simon: I should be very sorry if my hon. Friend thought for a moment that my reference was not quite fair. The reason why I did not deal at greater length with his speech in the Debate on the Second Reading was, frankly, that it did not seem to me that, in the Debate on the Second Reading of the Bill, to which but a single day had been given, very much time ought to be spent on what was essentially a speech on one detailed Clause in the Bill. With regard to my reference to the profits of this company, I have no objection to the making of profits which are properly earned, and my reference was purely in answer to the suggestion that, if this tax were imposed, someone or other was going to be ruined.

Mr. Radford: I am much obliged to my right hon. Friend. I did not feel that I was entitled to hear his decision on this question of a duty on power alcohol on the occasion of the Second Reading of the Bill, but, as my right hon. Friend the Member for Sparkbrook (Mr. Amery) has pointed out this evening, on the Report stage of the Budget Resolutions a promise was made by the then Financial Secretary to the Treasury that he and the Chancellor of the Exchequer would reconsider their proposals in this regard in the light of the further information which they had then acquired, and I well remember that my right hon. Friend the Chancellor of the Exchequer bowed in acquiescence and agreement with the undertaking then given by the right hon. Gentleman who is now Secretary of State for Scotland. I remember how glad I was to see that graceful bow which my right hon. Friend made in support of what the Financial Secretary was promising.
I am sorry that the hon. Member for Rother Valley (Mr. Dunn) is not here at the moment, but I heard his suggestion that it would be well if some light were thrown on this subject. As regards the vague talk that there has been about the company making a profit of 340 per cent., I would point out that that is on a small amount of deferred capital in is. shares, and is a very different matter from 340 per cent. on the total capital of the company. Other Members of the Committee have expressed a wish that a little light should be thrown on this subject, and I certainly consider that it is due

to my hon. Friend the Member for South Croydon (Mr. H. G. Williams), and to others who have spoken in favour of a reduction of the duty, that I should supply that light. The first point I would make is that, while the capital of this company, as my right hon. Friend has said, is nominally £475,000, it has also a reserve fund of £350,000, which does not rank for any dividend, although it helps to provide the profits. The capital, therefore, is not £475,000, but £825,000. The profits that the company has made during its nine years of life have averaged £104,000 per annum. The profits that it made last year were entirely exceptional, and amounted to about half the total profits made in the nine years. Moreover, that money was not made, as has been stated, out of the alcohol blend; not more than a quarter of the company's business was in this alcohol blend, which is known on the market as Cleveland Discol. I wish that some of those hon. Members who have been so free with their innuendoes and sneers had remained in their places, so that they might hear the truth and see a little light.

Mr. J. Griffiths: I sat by the side of my hon. Friend the Member for Rother Valley (Mr. Dunn), who has been called out of the Committee, and I saw the newspaper cutting from which he quoted an article in the "Daily Express." It was given very big headlines, and I presume the attention of the hon. Member has already been called to it.

Mr. Radford: I am much obliged to the hon. Member. I saw what I think is best described as the contemptible and scurrilous article in question. I was brought into particular prominence in it, although there are some 1,200 shareholders in the company There was nothing really said in the article except mere tittle-tattle which was beneath contempt, and which I treated with the contempt it deserved.
The references which have been made to the making of huge profits out of the sale of this alcohol blend are utterly erroneous and incorrect. I know that very influential oil interests have been very active in this matter, and, when it is not oil interests who are speaking, it is those who are interested in coal and do not wish to see power alcohol getting any share of the preference that is going,


to be given under my right hon. Friend's present Bill. I am not imputing motives or making any charge; I am stating a fact. I have heard one hon. Member speak already who, apart from those who may have been briefed by oil interests, is a director of an oil company himself, but I am not going into that; we each have our own methods of doing business, and mine is to tell the House at the outset that I am interested. I have gathered not so much from this Debate as from private conversations that Members have had with me on this subject, the views that are held with regard to it. I have been told, "What your company has done has been to blend alcohol with petrol, and, because the alcohol bore no duty and the resultant mixture was sold on the same basis as pure petrol, the company has made pots of money."

Mr. Lyons: Hear, hear!

Mr. Radford: I am very glad that my hon. and learned Friend says "Hear, hear," because perhaps I may be able to disabuse his mind at any rate. There are about five companies who do this blending of petrol and alcohol and the reason why the company with which I happen to be connected has alone been brought into prominence in the Debate is because it happens to be the only public company among them, and, therefore, the figures of the others are not known. Also, that company does the biggest proportion of this blending. In our blend the proportion of alcohol which has borne no duty costs us far more than the petrol plus duty that is also contained in the blend. It is not an economy to put in alcohol which is duty-free; we should have made more money if petrol alone had been used. We do not make this power alcohol; it is made by distilling companies, from whom we buy it, arid tha price which we and all the other four or five companies who are doing this have had to pay for power alcohol, although it has been free from duty until 2nd May, was much higher than the cost of petrol plus the 9d. duty.
Therefore, so far from this blend making lots of money, it is just the other way about; if we were not blending, but were selling pure petrol, we should make far more money, even after paying the 9d. duty. There is another point that I should like to make, because, although it is not the business of the House, I do not like

to hear these remarks made, and should not like any Member of the Committee to go away with a false impression. Not more than a quarter of this company's business during the year in question was in alcohol blend. The rest was in straight petrol, and the conditions under which exceptional profits were made had nothing to do with the blending of alcohol, but were due to the relative price levels in the markets of the world and the retail price here, plus freights, which might go up or down.
It is grossly untrue and unfair to make these statements and charges which hon. Members have made, based, in some cases, on inadequate briefing. Hon. Members from the Opposition Liberal Benches have been peculiarly active in this regard. [HON. MEMBERS: "They are not here."] They are not here now; but they have been as active as anybody. As my right hon. Friend the Chancellor of the Exchequer stated—I think it was on the Second Reading—the cost to any company which was blending alcohol with petrol of the proposed 9d. duty would amount to a little over 1d. a gallon. Fifteen per cent. of 9d. is 1.345d. I think that I can take the Committee into my confidence to this extent, and say that 1.345d. per gallon exceeds the profit that is made. That is the answer to these inspired figures which have been given by hon. Members. I felt it incumbent on me to answer these innuendoes with regard to the blending of alcohol with petrol, and in particular so far as they relate to the company with which I am associated.

8.27 p.m.

Mr. Hely-Hutchinson: I hope the Chancellor will not yield on this Amendment. The duty to which it relates is imposed solely in the interests of revenue. Let us consider it wholly from that point of view, without reference to its effect on manufacturing. Let us assume that the effect of imposing this duty would be to put an end to the manufacture of power alcohol in this country. The result would be that my right hon. Friend would get 9d. a gallon on imported alcohol, and he would save in addition the 8¾d. which he has to hand out on the alcohol manufactured in this country. Therefore, it would be an attractive proposition for the revenue. But what evidence is there that the effect of imposing this duty will be to kill manufacturing in this country? No argument


has been adduced to show that it will. My hon. Friend the Member for South Croydon (Mr. H. G. Williams), who introduced the Amendment to reduce the duty to 4½d., himself admitted that 4½d. was a "shot." For anybody with the encyclopaedic knowledge of my hon. Friend to come before this House with nothing but what he admits is a guess, was surprising. It shows how consistent he is. He cannot have had luncheon with anybody on the other side in order to get the necessary information. He spoke about legitimate forms of friendly bribery and corruption, and reminded me of the American lobbyist who complained that "some of these politicians will not stay bought."
For my part, I invited one of the vested interests on one side to have a drink with me, and I invited one of the vested interests on the other side to have luncheon with me. As a result of what I learned, I came to the conclusion that there was no justification for the removal of the duty now proposed. It is wrong to suppose that all the effect of this duty will fall on those companies such as that with which my hon. Friend the Member for Rushholme (Mr. Radford) is connected. There is the question of the profits of manufacturing as well as distributing. I am not prepared to support these figures in any detail, but I have been told that the all-in manufacturing costs of manufactured power alcohol in this country, after crediting the 8½d. a gallon received as rebate, amounts to something like 5½d. a gallon, and that that product, produced at a net cost of 5½. a gallon, is sold to such companies as that to which my hon. Friend the Member for Rushholme has referred at some such price as 1s. 2d. a gallon. Then his company comes along, and ekes out a precarious existence by selling it at 1s. 6½. a gallon.½

Mr. Radford: Has my hon. Friend forgotten that the garage filling men have to live, and also the cost of deliveries over 30, 40 or 5o miles?

Mr. Hely-Hutchinson: I appreciate that. I did not mean to imply that his company was making 4½d. a gallon profit; 4½d. a gallon is the gross figure with which he has to meet all the charges of the business. It is enough to suggest that this will not kill the industry in this

country. Therefore, I do not think my hon. Friend the Member for South Croydon, and my right hon. Friend the Member for Sparkbrook (Mr. Amery) should weep these "hot, unnecessary tears."

Mr. Amery: It was never suggested that the duty would kill the industry. The suggestion was that it would prevent development which was in the interests of the country.

Mr. Hely-Hutchinson: If the industry will go on and the right hon. Gentleman will succeed in collecting the extra revenue, I think everybody will be satisfied.

8.34 p.m.

Mr. Lees-Smith: My hon. Friends and I have also had some discussions with people interested in this matter. We did not approach the topic with any prepossessions, either one way or the other, and it may be of interest to the Committee if I state the conclusions to which these discussions have now led me. There has been a good deal of discussion about this rebate of 8¾d. a gallon. It is fairly clear that now that rebate confers a very considerable advantage on this industry, something equivalent to a protective duty. This is a raw material and—this is my answer to the right hon. Gentleman the Member for Sparkbrook (Mr. Amery)—it has got this particular form of protection. A duty of 10 per cent. or 15 per cent. is about the average for other raw materials in this country, and this is in a better position that that which it ought to occupy.
The argument has been adduced that if this special exemption were not allowed to continue the industry would be killed. The right hon. Gentleman the Member for Sparkbrook repudiates that, but I took down the actual words of the hon. Member for South Croydon (Mr. H. G. Williams), who is not now in his place. He certainly said that the chances are that production will not continue unless this special exemption is permitted. That argument has really been destroyed. There is only one company of importance concerned, and that company has succeeded in making profits equal to the whole of its paid up capital. We have had the most remarkable figures given by the hon. Member for West Swansea (Mr. L. Jones) that in 1932 the output was


18,000 gallons and in 1938, 9,000,000 gallons. It therefore seems impossible for anyone seriously to suggest that an industry with this spectacular increase will not continue its production. I have noticed a considerable change in the arguments put before the Committee to-day. It is argued that there is a parallel between the special concessions given in respect of the production of oil from coal at Billingham, the shale oil industry and the low temperature carbonisation process.

Mr. Radford: And benzole.

Mr. Lees-Smith: And benzole. There is no parallel. It is no argument at all to say that the whole purpose is to encourage an industry to use indigenous raw material. This industry uses molasses as its raw material, 90 per cent. of which comes from abroad, three-quarters of it from outside the British Empire altogether. Therefore, there is no parallel. The real parallel is the treatment given to petrol made out of imported crude oil. That is not petrol made from an indigenous raw material but from an imported raw material, which is exactly comparable to power alcohol made from imported molasses.

Colonel Baldwin-Webb: Would it alter the position if this raw material could be home produced vegetable matter—potatoes, for instance? It is possible that this sort of thing might be developed and might be the means of encouraging the agricultural industry to supply home produced vegetable matter.

Mr. Lees-Smith: I will reply to the question of the hon. and gallant Gentleman after I have concluded the point I am making. The parallel is between power alcohol made from imported molasses and power alcohol made from imported crude oil. The removal of this exemption is exactly consistent with the whole plan adopted in regard to the production of petrol in this country. In reply to the question of the hon. and gallant Gentleman the suggestion now is that, at a time of national emergency, we should not depend upon molasses at all but upon potatoes. I should say that potatoes would be required for food. I remember everybody telling us that potatoes saved the nation during the War. It is a mistake to suggest that our man-power should be diverted to making this petrol from potatoes when it can be

imported in very great quantities from abroad as long as we command the seas, and we have a Navy far more formidable than it was in 1914 compared with the Navies of the rest of the world.

Colonel Baldwin-Webb: I do not suggest for a moment that that should apply only to war time conditions. I think that in peace time, also, we should help the agricultural industry and help employment here by using home produced vegetable matter, such as potatoes and other materials.

Sir A. Baillie: Does my hon. and gallant Friend realise the uneconomic cost of producing power alcohol from potatoes, which is £60 a ton, as compared with £5 a ton when produced from imported molasses?

Mr. Lees-Smith: This industry is not the hypothetical industry that the hon. Member opposite seems to imagine. I cannot see why he should desire to put thousands of pounds into the hands of an existing company. I have seldom heard a case so completely met in debate as has been the case of the hon. Member for South Croydon.

8.42 p.m.

Sir J. Simon: Perhaps I may intervene at this stage to say a word or two because, as my hon. Friend the Member for South Croydon (Mr. H. G. Williams) told the-Committee with great frankness and straightforwardness, when he first raised this matter and produced a number of complicated arguments, I or the Financial Secretary undertook that the matter would be looked into further. I have done my best to look into it with care, and, I can assure my hon. Friend, with complete impartiality. I have come to a very clear conclusion, and perhaps the Committee will allow me to state how I arrived at that conclusion in my own way. I may be forgiven if I state one or two elementary things necessary to an understanding of why I take the view that the Clause should not be altered. Petrol has been taxed in this country since the year 1928. It was undoubtedly a revenue tax. If there ever was a revenue tax it was the tax on petrol. It produces a great deal of money and is very important for the Chancellor of the Exchequer and for the country. At that time, in 1928, the production of power alcohol was infinitesimal. I will give the figures.


In 1928–29 the total consumption of power methylated spirit, which is denatured alcohol for use in motor engines, was 15,000 gallons. That was at the time that we first started the tax on petrol. It climbed up in this sort of way. In 1932–33, as my hon. Friend the Member for West Swansea (Mr. L. Jones) said, the figure was 85,000 gallons, by 1935–36 it was 914,000 gallons, in 1936–37, it was 2,925,000 gallons, and the figure for last year is approximately 6,500,000 gallons.
I think that on what we call ordinary principles, the arrangement that you would expect to be made for a tax for revenue purposes would be to put a tax on both commodities, that is, an equal tax upon say, both a tin containing petrol and another tin containing an alternative motor fuel, which is a mixture of petrol, 85 per cent., and some other material. That would seem the natural thing to do. It was not done in 1928 because the amount of power alcohol produced was so trumpery that it was not worth doing; but the quantities having grown according to the scale I have mentioned. I came to the conclusion, when I had to review this difficult subject of petrol taxation in connection with the Budget, that I was not justified any longer in leaving power alcohol out. The idea was simply this, that if you are engaged in collecting tax from the motorist there is a certain difficulty in saying that if he orders mixture A, it is to bear the tax on the whole contents of the tin, whereas if he orders some rival mixture it has to bear tax on only a portion of the tin.
My right hon. Friend the Member for Sparkbrook (Mr. Amery) was right when he said that the production of power alcohol has made marked strides. I have been marking some of the strides. My right hon. Friend thought there was a prospect that it would ultimately displace petrol to the amount of 15 per cent. That is a very optimistic estimate, and my hon. Friend the Member for Rusholmc (Mr. Radford) agreed that it was, but if my right hon. Friend was right when he said that it will ultimately displace petrol to the extent of 15 per cent., then, surely, the Treasury were also right in taxing it, and they ought not to have been rebuked for doing so, because if 15 per cent. of the existing petrol consumed is to be replaced by

power alcohol it means that you are replacing 200,000,000 gallons of petrol. Two hundred million gallons of petrol taxed at 9d. a gallon represents £500,000. Therefore, if we allowed the present state of things to go on we should reach a point where not only would the country lose a great deal of revenue but we should have the industry coming forward and, not unreasonably, saying: "You knew perfectly well that this development was going on, and now we consider that we have a vested interest and are entitled to carry on our competitive business without being taxed in respect of its alcohol quantity." Constituents of my hon. Friend the Member for Halifax (Mr. Gledhill), we have been informed, were starting to build a distillery in the hope that they would be abl e to produce this stuff, and that it would be untaxed. The prospect that this taxation was likely to happen must have been apparent to persons who were following the trade.

Mr. Gledhill: The plans might have been held up.

Sir J. Simon: I do not think they have any complaint against the authorities. It has been pointed out to the firm in question by the officials that if it is a case of distilling alcohol there are many ways in which alcohol is used, and I hope that what they have contemplated doing will be no loss to them.
Then it is said, but I think the answer given by the right hon. Member for Keighley (Mr. Lees-Smith) was complete, that in imposing this new tax we ought to follow precedent and arrange for a measure of protection for power alcohol. I think I am right in saying that my right hon. Friend the Member for Sparkbrook went so far as to say that we ought to aim at freeing ourselves as far as we can from external sources of fuel. That seems to assume that you can use power alcohol and nothing else, but alcohol is simply an element that is added to petrol, not always petrol of the very highest quality. In order to use the power alcohol and to turn it into motor fuel considerable quantities of oil will still have to be imported, but we all hope very much that in the course of a few years we shall find a much more effective way of producing the oil from indigenous material.


It has been said, quite rightly, that we do not give a preference to light oil which is refined in this country from crude oil, if the crude oil is imported. That is the true analogy to quote when it is suggested that we should give a preference to power alcohol because it is distilled in this country. The hon. and gallant Member for The Wrekin (Colonel Baldwin-Webb) asked a very natural question, a very practical one, whether it is not possible to imagine that this power alcohol might be produced from other vegetable materials, but, as the right hon. Member for Keighley said, we must look at the facts as they are and not be too fanciful. What are the facts? First, power alcohol, that is denatured alcohol, which is mixed with oil in order to make a motor fuel, is made from imported molasses. Last year there was not a pint of it that was made from home-produced molasses. There are such things as home-produced molasses, a by-product of the beet sugar industry. Those molasses are used economically for various purposes, such as the production of yeast and cattle food. The reason why home molasses are used for these purposes whereas imported molasses are used for distilling power alcohol is because, economically or chemically, it is found to be the best way of using these two sources of supply. I do not think the House of Commons would be justified in giving a further preference to the home-grown sugar industry, and I cannot conceive that it would be a reasonable thing in the circumstances to say that power alcohol, if it is distilled from home-produced molasses, which in fact it is not, shall escape duty or shall be given a lower duty, but that if it is produced from imported molasses it shall pay a higher duty.
Molasses is a very bulky substance. Something like 3½ tons of molasses are required to produce one ton of the ultimate product, and for reasons which have been pointed out by the hon. Member for Maidstone (Sir A. Baillie) I do not think it is a practical proposition to use potatoes for the purpose of producing alcohol. If hon. Members consider the economics of the subject they will realise that there is very great difficulty in that suggestion. Moreover, there would be very great administrative difficulties in drawing a distinction between alcohol which has been distilled from home-produced material and alcohol produced from materials imported from abroad.
I have done my best to state the case quite impartially and I have considered it impartially. I was willing to believe that I had made a mistake and that there ought to be some modification, but we have to look at the matter from the general interest of the public. I have explained to the Committee the considerations which have made me think that the proposal which we make is right. I do not believe that it will have the effect of stopping the production of power alcohol, which is being produced at the greatly increased annual rate which I have explained and is not likely to be blocked because of the duty being imposed.

Colonel Baldwin-Webb: Has my right hon. Friend considered what is taking place in other countries where they are endeavouring to produce power alcohol from home-grown vegetable matter?

Sir J. Simon: I am much obliged to the hon. Member. I know that in some countries in Europe quite considerable advance has been made in producing alcohol from home-grown materials. It is a matter which is being closely examined by those concerned, but I cannot give any more detailed information about it now. I hope I have satisfied the Committee that my approach to this subject has been quite reasonable. I should have been perfectly willing to make this duty lower if there seemed to be good and sufficient reasons, and I am not taking up this attitude because I deny that there are cases in which there ought to be in the interests of the country as a whole a measure of protection. There are, but I do not believe on the investigations I have been able to make, that any case has really been made out for the present Amendment and I hope the Committee will decide to accept the proposal as it is in the Bill.

Amendment negatived.

Clause ordered to stand part of the Bill.

Clause 4 ordered to stand part of the Bill.

CLAUSE 5.—(Increased customs duties on tea.)

8.57 p.m.

Mr. Barnes: I beg to move, in page 5, line 16, to leave out "increased".
During the discussions we have had on the first three Clauses we have heard the voice of large oil corporations pleading their case to the Committee, and they


have not lacked keen advocacy. This Amendment does not raise an issue concerned with wealthy corporations, but it brings to the notice of the Committee the position of wage earners in relation to the additional duty on tea. I do not begrudge the Chancellor of the Exchequer a relief from the arduous duties of sitting on the Front Bench, but I should have preferred to have had his attendance when discussing this Amendment rather than when we were discussing the oil duties. I also noticed that during the previous discussions there was a complete absence of any appeal to the patriotism or a sense of obligation of these large and wealthy companies towards the State and the programme of rearmament, but I observe, on the other hand, that when a particular tax is being placed upon the wage-earners their patriotism is flattered and we have acknowledgments of their high sense of obligation and duty. That was the case when the Chancellor of the Exchequer was imposing this additional 2d. per lb. on tea. He ended his comments in this part of his Budget speech by saying:
I believe that there is a sense of willingness and even a pride in the humblest homes to take a share in this rearmament outlay."—[OFFICIAL REPORT, 26th April, 1938; col. 66, Vol. 335.]
There was no suggestion that the wealthy oil magnates, whether they are producing power alcohol or oil from coal, take any pride in sharing this national obligation of rearmament, but we get an appeal to the humblest homes in the community. It is one of those vague, sentimental patriotic appeals. What are the humblest homes which are being called upon to accept this additional burden? I presume the Financial Secretary will not differ from this classification. I should say that they are homes where the breadwinner is unemployed, where the old-age pensioner lives, and a widow who is trying to bring up her children on the widows' and orphans' pension. I suppose they would be classified among the "humblest homes." We are all familiar with what we know as the charwoman. My experience has been that if you investigate the lot of the average charwoman you will find that she is very often a woman suffering under a considerable handicap. She may have an invalid husband, she may have lost her husband and have no pension. In any case the

majority of women who go out working, having reached a mature age themselves and having to carry on their own domestic work as well, do not do so for the pleasure and the joy, but usually because of difficult circumstances. I suppose that type of person will be classified among the humblest homes in the country.
Then there is the casual labourer, the farm labourer, and others who exist on very low and intermittent wages. These all, I suppose, would come under the Chancellor of the Exchequer's descriptive phrase, and will be proud to pay this additional burden towards rearmament. I want to say in all seriousness that I think the Chancellor of the Exchequer might have left words of that character unsaid. I do not think it improves the public life of this country for persons in prominent positions, even when they are imposing, sincerely as they may think, necessities of this kind on the country, to use language which I can only describe as cant and humbug.

The Deputy-Chairman: I do not wish to restrict the hon. Member unduly, but I think I ought to point out that if we have a general discussion on this Amendment it must not be repeated on the Clause standing part of the Bill.

Mr. White: Further to your Ruling, Captain Bourne, will you allow a discussion on the question of the preference to take place in the general discussion?

The Deputy-Chairman: The Amendment in the name of the hon. Member for East Wolverhampton (Mr. Mander) and the hon. Member for East Birkenhead (Mr. White) clearly cannot be moved unless the word which it is now proposed to leave out is deleted. Therefore, it is obvious that any discussion on that should take place on this Amendment.

Mr. Barnes: I was presuming, Captain Bourne, that following the precedent that had been established on previous Clauses, we should have a wide discussion on the first Amendment—

The Deputy-Chairman: If the hon. Member will forgive me for interrupting him, I wanted to make quite clear that he realised that.

Mr. Barnes: The next point I wish to make with regard to the statement of the Chancellor which I have quoted is that


the wage-earners generally are already contributing very heavily to the cost of rearmament. They are paying revenue taxes, on many of the necessities which they consume. They are paying through imposts under the Import Duties Act, levies on imported meat, subsidies in connection with wheat and sugar beet, and artificial prices arising from the marketing schemes. Therefore, it appears to me that there is no point in the Chancellor's statement that a contribution of this kind is equitable in any way in connection with rearmament. In the near future the same category of people will very likely have to pay a further 4d. a gallon on milk, penalised because of the fine weather. In making this case against the Tea Duty, I do not do so because I fail to recognise that other sections of the community are also paying heavy taxation at the present time. I recognise that completely, but there is a difference. The 3,000,000 persons who come within the Income Tax schedules, however difficult or onerous may be the burden of that taxation, are not individually or economically distressed as a result of it, and no hon. Member would dare to argue that they are. But the Committee should recognise that the people to whom the Chancellor referred when he spoke about the humblest homes in the community have a genuine, day-to-day and continuous struggle to make ends meet and to obtain the bare necessities of life. Therefore, it does not seem to me to be relevant to argue in favour of the Tea Duty by saying that all classes in the community are bearing heavy taxation.
I urge the Committee to accept this Amendment for the following reasons. The Tea Duty is too heavy in proportion to other commodities. During the lifetime of the present Government there have been three imposts; first 4d. a lb., then an additional 2d. a lb., and now a further 2d. a lb. While the Tea Duty is one that it is easy for the Treasury to collect, it is unequal in its incidence in relation to the prices. The sum that it will yield on this occasion, namely, an additional 3,000,000 in round figures, is not a material factor in a Budget of £1,000,000,000. I submit that if a further £3,000,000 is necessary, it could be obtained with less hardship than is caused by placing the additional tax on tea. I have never considered that it is the responsibility of any hon. Member

of the Opposition to say how taxation should be levied; that is the responsibility of the Government. However, I think I am entitled to make the general point that we are certainly living in a period in which there is expanding expenditure on all forms of pleasure, recreation, entertainment and luxuries. There has in recent years been a phenomenal growth in expenditure on all forms of competitions, pools and other exciting ventures. I feel that if public opinion could be consulted on a tax of this description, the vast majority of wage-earners would consider it more equitable that sources of this nature should be tapped, rather than there should be an additional tax on tea. Again I recognise that Income Tax is high, but the Financial Secretary cannot say that to raise another £3,000,000 from the Super-tax payers would reduce any of them into the category of the humblest homes of this country.
Further, there is the question of prices. The prices of the bulk of the tea that is sold in this country range from 1s. 10d. to 2s. 6d. a lb., and not a great deal of tea is sold much beyond the prices of 3s. or 3s. 6d. a lb. I draw the attention of the Financial Secretary to the following percentages of burden. On tea at 2s. a lb., the percentage of the burden of the tax amounts to 33⅓ per cent. of the price of foreign-blended tea, and 25 per cent. of the price of Empire tea; at 2s. 6d. a lb., 27 per cent. of the price of foreign-blended tea, and 20 per cent. of the price of Empire tea; at 3s. a lb., 22 per cent. of the price of foreign-blended tea, and 16.6 per cent. of the price of Empire tea. On tea at 5s. a lb., the tax burden is 13 per cent. of the price of foreign tea and 10 per cent. of the price of Empire tea. It will be observed that the cheaper the price of tea, which the lower paid people are compelled to buy, the higher the percentage of tax.

Captain Wallace: I apologise for interrupting the hon. Member, but I would like to make one thing clear. The hon. Member is quoting various figures, which are correct; but I think the Committee ought to realise that go per cent. of the tea which is purchased by everybody, including the working classes, is Empire tea, and that it is really only the lower figures that are relevant.

Mr. Barnes: That may be the case, but it does not alter my main point, which


is that the higher percentage falls on the lower-priced teas. I am quoting the two extremes. I thought the consumption of Empire tea was in the neighbourhood of 80 to 85 per cent., but even accepting the right hon. and gallant Gentleman's figure, I would point out that on tea priced at 2s. per lb. the percentage on Empire would be 25 per cent, or a quarter of the price, whereas taking the other extreme of tea at 5s. a lb., it would be only 10 per cent. or one-tenth of the price. I think I am entitled to make the point that the fact that this duty is easily collected by the Treasury does not justify the imposition of a heavy burden like this on such a commodity—a burden which works out so unequally in its incidence.
When the Chancellor was imposing an additional 6d. in the £ on the Income Tax, we saw one of those instances of financial jugglery, if I may so call it, in the proposal to increase the wear-and-tear allowance to machine industry. I would end on this note—that we ought to consider the wear and tear suffered by the average housewife in carrying out her rather toilsome duties, especially when she is bringing up a large family. All who are familiar with working-class life know that it is to the cup of tea that the worn-out mother very often turns for a little quiet solace. I am not inclined as a rule to stress points of this description, but when I listened to the Budget statement, in which the country was asked to raise nearly £1,000,000,000 in taxation, and took into account all the increases in taxation which were proposed, I felt ashamed to be a Member of a House which could not find an additional £3,000,000 without putting an added duty on the cup of tea.

9.18 p.m.

Mr. White: We have already had a number of discussions on this duty and I welcome this further discussion as it will afford an opportunity to hon. Members opposite to explain, vocally, their support of this proposal which hitherto has displayed itself exclusively in the Division Lobby. I think, with one exception, the only speeches in defence of this tax have been delivered from the Front Bench. Those discussions have been extremely useful, and the speech to which we have just listened was an excellent summary of the grounds for the opposition to this

tax, which is a wholly bad tax. There is nothing to be said in its favour from the point of view of the consumer, the taxpayer or the producer, whether in the Empire or elsewhere, and I hope no one will allow himself in future to make use of the phrase quoted by my hon. Friend about the pride which would be felt in the humblest homes in paying this tax.
It is, of course—although the fact is not recognised by the Chancellor of the Exchequer—a partial tax. It is one of those "partial affections" from which, at the beginning of our proceedings, we pray daily to be delivered. The people who are certain to pay are the poorest of the poor. They will pay in a higher proportion than anybody else. They cannot escape because there is no cheaper tea to be obtained, and they use more of it. The right hon. and gallant Gentleman the Financial Secretary in an earlier discussion said that the average consumption was only 9¼ lbs. per head of the population and that consequently the tax would only amount to 1s. 6d., or some such amount. That is an average for the whole country. But there are many households, where pride is supposed to be felt in the payment of this tax, in which the only drink, excepting cold water from the tap, is tea, and the average consumption in those cases is very much above 9¼ lbs. per head. Therefore, from the point of view of the consumer it is a bad tax. It is unjust in its incidence, and no defence can be made for it on that ground.
It is bad from another point of view. A few years ago the price of common tea at auction was 4½d., 5d. or 6d. per lb. When it was proposed in those days to put on a tax of 2d., arguments could be brought against it—no doubt the same arguments as we are using to-day—to show that it was a very serious matter. But to follow up that imposition with a further addition at this time when the price of common tea at auction is over is. per lb. is a much more serious matter. Hon. Members should bear in mind that when the last impost of 2d. was placed on tea, the price of common tea was less than it is to-day. The necessity for producing cheaper blends then concentrated buying upon cheaper qualities of tea and those qualities of tea were gradually forced up in price until, on top of the advance of 2d. per lb. in duty, there was a further advance of 2d. per lb. in the retail price. There was, in effect, a rise of 4d. per lb.


It remains to be seen what will be the effect of this further increase in duty upon the price of the tea.
The imposition of the duty this time was followed by an immediate rise of about ½d. per lb. in the price of tea at auction. Subsequently, the price fell away again and it is now, I think, somewhere about where it was when this additional duty was imposed or perhaps ½d. less. We have to remember that in these days the tea market is under control and the prospect of the release of further supplies may prevent a rise in price such as took place two years ago when the duty was raised by 2d. I hope the Chancellor of the Exchequer and the Financial Secretary will look into this matter and keep a watch on the situation, and if it is found that the price of common tea is being raised to an extent which may cause a further rise in the price of packet and blended tea, that they will consult with the control committee and take steps to see that supplies are released which will prevent any increase in price.
This is also a bad tax from the point of view of the grower of tea, because the consumption of tea at the present time, unless possibly in the Indian market and to some extent perhaps in America, is not expanding. A considerable publicity campaign has been set upon foot, costing a very considerable sum, in order that the decline in consumption of recent years may be checked and, if possible, expansion brought about. So far that campaign has not led to anything more than retarding the decline. Tea has to compete in a way that it did not some years ago with an immensely costly and effective campaign of advertising in favour of all sorts of competing beverages, and there is no doubt that, from the point of view of the producer of tea, the increase in the tax is a very unfortunate circumstance. I should like to ask if any representation has been received from the Government of India with regard to it. I notice that meetings have been held in Calcutta and in Ceylon on the subject. It is not calculated to increase the enthusiasm between ourselves and tea-growers abroad that this increase, which is felt not to be fair or reasonable, should be placed upon this article.
I have placed on the Paper an Amendment designed to equalise the duty as

between Imperial and foreign-grown tea. There is a growing inclination and desire to do away with the disadvantage that accrues from the preference upon teas grown in India and Ceylon. It is an assumption to which everyone agrees at first sight that if you give an article a preference it must help it, but in the case of tea it is quite clear that to many growers and dealers there is a positive disadvantage arising from the preference. Several chairmen of companies in London have at their annual meetings expressed dissatisfaction with it, and have said it was time that the disadvantage put upon Empire tea by the preference should be done away with. I agree with them, because all that has happened is that the tea that has been displaced in the London market by the preference has displaced tea grown in India and in Ceylon in the Australia, American and other markets. I have had taken out figures showing the direction of tea from India and Ceylon since the preference was introduced. In 1929–30, the last year in which there was no preference, India and Ceylon tea almost monopolised the market in Australia and had a very much larger share of the United States market. Now they have not got those markets because they have been replaced by tea from Java and Sumatra and cheaper tea from Formosa and China. I have here a report on the working of the season 1937–38 with regard to the effect of Imperial preference and the direction of the exports from India and Ceylon. Referring to the Australian and New Zealand market it says:
Exports to these markets show a further slight shrinkage. India suffers under a crippling disadvantage in Australia as compared with Java through the effects of Empire preference in the United Kingdom, while the development of the export market to New Zealand is impeded by the continued preferential treatment in that Dominion in favour of Ceylon.
Turning to the United States, it goes on:
Although exports to this country from India direct show a falling off, the total imports of tea into the United States show a useful increase as compared with the previous year. Here, again, the Empire preference in the United Kingdom adversely affects the expansion of India's tea trade with America.
With regard to Egypt:
Being essentially dependent on low-priced tea, the Egyptian trade goes to the market offering tea at the cheapest rate. With the incidence of Imperial preference India has to


a large extent lost this trade, and her exports to Egypt this season were almost negligible.
The conclusion to which I come, after reading the opinions of those who grow and sell tea, is that the matter calls for further examination. I get the impression that the Treasury is imperfectly acquainted with the nature of the trade and the effects of the tax. If it is wished to place a tax upon tea which shall affect the whole community equally fairly and justly, it can only be done by taking control of the whole trade and see that one quality is sold at one price. For these, and other reasons, I support the Amendment.

9.28 p.m.

Mr. Silverman: I intervene only in order to deal with references subsequently made to my own speech in the discussion that we previously had on this matter. The hon. Member who has just addressed the Committee said that Members opposite have not spoken in support of this Duty. I think that is not quite the case. Two Members on that side who followed me made speeches and, if it is true that they did not advance many arguments in support of the Duty, at any rate they made some references to those who spoke from this side. I am sorry that neither of them is in his place to-night, but that is no fault of mine. I think the Committee knew very well that this matter would be debated again to-night, and I am afraid that I assumed in my innocence that those who had taken the trouble to refer to others on that occasion would be here on this occasion.
One Member, the hon. Member for Elland (Mr. Levy), said that I had previously made contributions to the Debate and that I appeared to make my appeal, not to reason, but to passion and emotion. The hon. Member for Bolton (Sir J. Haslam), later in the Debate, said that it was always a poor thing in support of a case to overstate it, and that I had appeared to lead the House to believe that the imposition of this duty would cause the heavens to fall. I do not think the heavens will fall, and I do not think I said anything to lead anyone to believe that I thought the heavens would fall. With regard to the statement of the hon. Member for Elland that I was addressing my appeal to passion and emotion, to what else can you address your appeal in a matter of this kind? I most pro-

foundly believe that this tax is a thoroughly mean and despicable thing. I do not know whether anyone thinks that that is an appeal to passion and emotion, or that it is possible to weigh up nicely, in terms of arithmetic or logical finance, whether or not a matter is mean and despicable. I think people are so constituted that they either recognise the meanness of a thing at sight or do not recognise it at all, and if there are people who do not think that to go to the poorest people in the land and take some of the very few coppers out of their pockets, and to cover that by some appeal to their patriotism or some statement that they are very proud that their destitution should be rendered still more destitute—if there are people who do not see how mean and despicable that is, I am afraid I cannot help them.
I have no apology whatever to make for expressing my own view that it is in the highest degree a mean and despicable thing, for which no rational justification can be advanced or has yet been advanced. Ex hypothesi, you are dealing with people who are not merely poor, but who are either over the borderline of destitution or just upon it. You are asking them, in a Budget of £1,000,000,000, to find an extra £3,000,000 by an extra tax upon an article which is at one and the same time an article of food to them and in many cases their only luxury. You are charging it in a manner which makes the poorest pay most, which makes the lowest grade and quality of the article pay the highest tax, and which makes the charge greater in inverse proportion to the quantities which are bought; that is to say, those who must buy their tea in ounces and two ounces will pay more than those who are able to buy their tea in quarter-pounds, half-pounds, and pounds. These, I think, are facts; they are not an appeal to passion or to emotion, and they are not, I think, an overstatement of the facts as they are admitted to be. If those are indeed the facts, is there anyone whose social experience is so inadequate that he cannot realise that what is being done here is to impose an extremely heavy burden upon backs that are already overloaded and upon people who will find it a very great hardship indeed to add to those hardships which already they undeservedly bear?
While dealing with that point, may I deal with one argument or, if not an argument, a piece of controversy that was used, I think, by the Chancellor himself, and which he thought to be conclusive against the opposition to this tax? He went back into the previous history of the tax, to an occasion on which the tax was reduced, and he quoted from speeches then made on this side of the House to show that that reduction in the duty was not received with gratitude but that people on this side regarded it as a very small thing indeed. With that kind of cold logic which loses all its appeal by being a purely formal logic, divorced of all reality, a kind of logic which appeals to the Chancellor and is his political stock-in-trade, he said that because on that occasion a reduction of the duty was not received with gratitude, an increase of the duty to the same extent must necessarily be a small thing. With the greatest respect in the world to what I admit to be an intellect higher than my own, I think that was the purest nonsense in the world.
I have not the gift of the right hon. Gentleman's lucid expression, but I hope I have made myself clear. It may well be that if you already have an overburdened back, a very small increase will break it, whereas to take a very small amount off will make no appreciable difference, and that is the point. It is quite true that if you were to reduce the Tea Duty by 2d., you would not have introduced a great deal of improvement into the lot of the poorest and humblest people in this land, but if you add a further burden to it, you do an amount of harm that is greater, by reason of the heaviness of the burden which you are inflicting, than would be the corresponding relief if it were removed. It is Mr. Micawber's proposition all over again, that 6d. in the pound is a very small item, but 6d. above your pound of income is enough to put you in very great difficulty, whereas 6d. just under the pound leaves you very much where you were. I hope that, in whatever reply is made to-night to this discussion, that argument at any rate will not be used, that because a relief of 2d. in the pound was not thought to be a very great thing, it therefore follows that an increase of 2d. in the pound may not be a very great additional burden.
The right hon. Gentleman, in winding up on that occasion, dealing with the point about the pride with which these destitute people will increase their burden in order to increase the amount of armaments in the world, which will spell their own destruction, said he thought they took a very great pride in their country. Of course they do. Who should take a pride in their country more than the people who make it? Certainly they do. They make the clothes that we wear, the houses that we live in, the factories in which our goods are produced, the ships which carry them to the four corners of the world, the docks; they provide the service behind the shop counters, the work in the factories, the laundries, the bakeries, the dressmaking establishments, the haircutters' shops. All the people who make life possible and decent, who for the best years of their lives have contributed to what measure of civilisation this country possesses, and who at the end of those years are left destitute with 10s. pension, which is not sufficient to relieve their destitution—certainly they are proud of their country. Is it for us to be proud of picking their pockets in those conditions? The question is not whether they are proud to make the contribution, but whether this House ought to allow them to make the contribution, and whether any self-respecting community would not without the slightest hesitation raise this paltry £3,000,000 in some other way which would leave no sting or shame behind it, and which would enable us to balance our Budget without feeling that the lot of the hardest-hit people in the country had been made a little harder.

9.47 p.m.

Mr. Barr: The case for a decrease in this impost has been so well stated -by my hon. Friend the Member for East Ham, South (Mr. Barnes), the hon. Member for East Birkenhead (Mr. White), and my hon. Friend the Member for Nelson and Colne (Mr. Silverman), that I do not propose to detain the Committee long. There is an element of unreality in those of us here who know so many of the comforts of life, and know so little of the distress with which every day the poorest of the poor are confronted as to supplies for their tables, trying to estimate what it means for them. The Chancellor of the Exchequer himself paid a tribute to this aspect of the problem when he said:


I well understand that even an extra halfpenny per week is a material and appreciable addition to the expenses of those with the smallest incomes."—[OFFICIAL REPORT, 26th April, 1938; col. 66, Vol. 335.]
I do not think, however, that the Chancellor, or any of us, fully realise the meaning of a new impost like this on these poor people. Reference was made by my hon. Friend to a charwoman. I knew a charwoman, one of my congregation, who on a Saturday afternoon was left with two halfpennies of which she said she would spend one halfpenny on tea and one halfpenny on sugar. It is a common proverb that "nobody knows where the shoe pinches but he that has to wear it," and we should realise that the poor have a struggle, the awful severity of which is known only to themselves, and that the smallest impost might be an almost intolerable burden to them.
Reference has been made to the statement of the Chancellor as to the pride with which this impost would be received among the poor when they realised that they were making this contribution to the rearmament programme. I think of some of my poor people—and I have in some respects one of the poorest and most poorly housed constituencies in the country—I think of them now as they are going to drink their tea if not with toast, at least with a toast in these terms: "Here's to the health of the Chancellor of the Exchequer; here's to the Minister of Defence; here's death to Hitler; here's death to Mussolini." But now they are not so sure that there is death in the cup for Mussolini. They would drink their tea and eat their bread with more gladness if the Government had given them occasion to say, "Here's death to unemployment; here's death to poverty; here's death to this house in which we are obliged to live." It is argued that tea is a luxury. It is a commonplace to say that the luxuries of one age become the necessities of another, and that is the position to-day.
I would emphasise what has been said that the consumer, and especially the poorest of the consumers, pay not only the tax but something more. Here I would like to adduce the testimony of one who is very familiar with the subject, Provost James Paterson, Provost of Milngavie, who is in the tea trade, and who was the Scottish representative on the

Tea Control Committee of the Ministry of Food during the War. He wrote to me after the Budget was introduced:
During 1929 to 1932 one customer of mine was retailing tea at 6¾d. and 8d. per lb., but these were abnormal prices. In the spring of 1932 tea was being regularly retailed at 10d. and is. per lb., these being the retail standards of the lowest priced teas. To-day the relative prices of these are 1s. 10d. and 2s. per lb., or an advance of is. per lb., showing a percentage increase of 120. This before the present Budget advance. This increase falls particularly hard on the poorer classes as teas in grades above this have not risen in the same ratio, many of them being only advanced by the increased rate of duty, that is, 4d.
We object to this tax because it is an addition to the imposts on food, and is an indirect tax added to those which are causing a rise in the cost of living.
We can defend this Amendment with a sense of consistency and loyalty to our own programme. We had an old cry, almost before the days of the advent of the Labour party—"A Free Breakfast Table." It has been loyally pursued by the Labour party from first to last. I should have had more satisfaction if we were advocating the abolition of the tax entirely. It is one of the objects of our movement, and one of those things about which no taunt can be thrown against us. There are very few parties in the State but are guilty of inconsistencies from time to time; at any rate, when we were in office we swept away entirely this impost on food in the Labour Budget of 1929.

9.54 P.m.

Sir Arthur Salter: I would like to state a few reasons why the Government should reconsider this proposal from a rather different point of view from that from which most Members have spoken. I do not propose to emphasise the weight of the burden of this increase, because naturally the Government would reply that in a Budget which included taxation on the scale and magnitude of this Budget a tax producing as little as this does cannot constitute a very heavy burden. I suggest the Government should reconsider it, not because the burden it imposes is very high, but because the tax in itself is open to serious objections. I ventured to congratulate the Government last year—and I do so again this year—upon introducing a Budget in which, for the first time for a long period, the proportion of indirect to direct taxation had fallen, and fallen considerably. It is a


great improvement upon earlier Budgets, and I think it is a great pity that this Budget should have been marred by an exception which is so unimportant as this from the point of view of producing revenue.
It is obvious that in comparison with direct taxation indirect taxation operates as an Income Tax inversely graduated, and that is specially true of an indirect tax upon a commodity when the consumption of it, as between rich and poor, is in quantity so nearly equal as in the case of tea, and when the tax is a quantity tax and not an ad valorem tax. The effect of that tax is an inversely graduated Income Tax, with the graduation becoming very steep indeed in the case of the poorer taxpayers. From the point of view of revenue I suppose that this tax was added as a kind of token tax; so much direct taxation having been added, it was necessary to put on this small addition to indirect taxation. I am all in favour of token taxes when the principle to be maintained is a good principle, but in a case like this, where the principle is open to very serious criticism, such a token tax is most objectionable. It is an additional irritation to the taxpayer—the indirect taxpayer—if he feels that he is being taxed not so much to provide revenue as to ensure that he does pay something in view of the very much greater payment—as I admit—to be made by the direct taxpayer. This tax being one which is to a rather exceptional extent even among indirect taxation one that operates, with an inverse graduation, most heavily on the working classes, I earnestly ask the Government to consider whether it is really worth while to persist with it, considering the small amount involved.

9.59 P.m.

Mr. R. J. Taylor: I want to add my protest against this tax. I listened to the hon. Member for Oxford University (Sir A. Salter) giving a very involved and intricate description of the difference between indirect and direct taxation, and I am not going to follow him in that, because while the ratio of indirect taxation to direct taxation has to some extent fallen it has not decreased to the extent it ought to have done. We are living in a time when profits are being made at an increasing rate, and the Chancellor could have found the money for armaments by

the direct method much more easily than by an impost such as this. Reference has been made to the Chancellor of the Exchequer speaking of the pride that our people would feel in making a contribution towards rearmament. The previous Chancellor of the Exchequer, when he introduced the 2d. duty, though he did not use exactly the same words—because I do not think he would be capable of using the same words as the present Chancellor—used language which meant the same thing. He said that he had placed the 2d. on tea so that the poor people could feel that they were playing their part, doing their duty as regards the rearmament programme for the Defence of the country and of the Empire.
I notice that those Liberals who have broken away from the old tradition had a conference the other day. The Chancellor was there, and so was the Secretary of State for War. The Secretary of State for War said that we were getting on beautifully with rearmament, that we were spending nearly £1,000,000 a day, though in our opinion it does not necessarily follow that we are getting the goods at that rate.
At that same time that he was speaking about the humble people of this country feeling that they would want to do their duty, the previous Chancellor of the Exchequer was introducing the National Defence Contribution, and at that, I remember, the spokesmen opposite of the vested interests went On strike. They compelled the Chancellor of the Exchequer to withdraw his National Defence Contribution. They compelled him to make concessions to building societies, to make concessions to every vested interest, but not to any interest in which the working classes were concerned. There was no concession to the cooperative societies nor to any of the other humble people. If my memory serves me aright, the Chancellor only wanted to raise a few millions by National Defence Contribution—I think it was £15,000,000, but never mind the figure—but Members opposite protested that it would produce £100,000,000, and so that National Defence Contribution was withdrawn and a new National Defence Contribution substituted. The present Chancellor estimated that he would get £25,000,000 under it, but he has received only £20,000,000.
This duty on tea is to raise £3,000,000, and I say that £2,000,000 or £2,500,000 of that will come from the poorest of the poor. Why did not the Government screw up National Defence Contribution? You would not need to have this impost then, because of the difference between the £20,000,000 and the £25,000,000. This point may not seem much in itself, but we go home every week and mix with our people, meeting the old age pensioners who tell us a most pitiable tale of how, after a long life of service to this nation, they are receiving 10s. a week. They tell us of their struggle to appear respectable in the eyes of their fellow-citizens. We also meet the man of 65 whose wife is not yet 65 and who has only the 10s. a week, and goes to the public assistance committee for the rent. There is the man who served through the War; the medical board always find that his trouble is old age, but he struggles along in most adverse circumstances. This is a heavy burden for such people.
I have been looking at the Budget income which the Chancellor gets, and I find that he gets £7,000,000 in respect of tea. The outstanding item is sugar, £11,000,000. I turn to another duty, imposed by this Government upon beef and veal; the figure is £3,500,000. If I remember rightly, that money is raised by Import Duty upon chilled meat from the Argentine.

The Chairman: I would remind the hon. Gentleman that we are discussing the duty on tea.

Mr. Taylor: I have made my point, Mr. Chairman, which is that if you go through all the items comprised in the enormous sum of £221,000,000 which is raised, you find that the bulk is passed on to the working class and to the poorest of the people. It is a mean and miserable thing for the Chancellor of the Exchequer to raise £3,000,000, and to try to awaken some feelings of patriotism in people who have not a darned thing to fight for. The first time I was in this House, some years ago, the present Chancellor of the Exchequer sat on the Liberal benches, and I remember when he was lambasting the then Chancellor of the Exchequer the right hon. Gentleman the Member for Epping (Mr. Churchill), for raiding the Insurance Fund. My, how you have

departed from those Liberal days. When I listen to you, you are now raiding the last penny from the poorest of the poor. I could understand the late Chancellor of the Exchequer introducing a proposal like this. To me, he always looks as cold as the fish for which he fishes, but I cannot understand you, Mr. Chancellor of the Exchequer—[HON. MEMBERS: "Order!"]—leaving your Liberal tradition.

The Chairman: Less of the "you," please. The hon. Member will recollect that he is addressing the Chair.

Mr. Taylor: Well, Sir Dennis, thinking of the right hon. Gentleman the Chancellor of the Exchequer, away back in the days when he was not in that position, I should have imagined he would have more kindly remembrance of those whose claims he used to advocate on the Liberal benches.

10.11 p.m.

The Parliamentary Secretary to the Treasury (Captain Margesson): I beg to move,
That the Chairman do report Progress, and ask leave to sit again.
I do so in view of the announcement which the Prime Minister made to-day at Question Time.

Committee report Progress; to sit again To-morrow.

Orders of the Day — WAYS AND MEANS.

Considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

Orders of the Day — DUTIES ON MOTOR CARS, MUSICAL INSTRUMENTS, CLOCKS, FILMS, &C.

Motion made, and Question proposed,
"That—

(1) as from the twentieth day of August, nineteen hundred and thirty-eight, Section three of the Finance Act, 1925 (which imposes duties of customs on motor cars, musical instruments, clocks, films, etc.), and any other enactment which amends or expressly relates to that Section, shall cease to have effect;
(2) the Treasury shall by order direct that, as from the said date, there shall be charged under Section three of the Import Duties Act, 1932, on all goods which immediately before the said date were chargeable with a duty of customs under Section three of the Finance Act, 2925,


an additional duty of such an amount as will, with the general ad valorem duty, amount to the rate of duty so chargeable thereon immediately before that date;
(3) any such order shall be deemed to have been made under the Import Duties Act, 1932, but for the purposes of Section nineteen of that Act shall be deemed not to be an order imposing a duty of customs;
(4) Section five of the Import Duties Act, 1932, and Section two of the Ottawa Agreements Act, 1932 (which relate to Imperial preference), shall not apply to any such goods as aforesaid, but all such goods which, but for this provision, would be exempt from the general ad valorem duty and any additional duty shall, as from the said date, be charged with those duties at the preferential rate of two-thirds of the full rate."—[Mr. Oliver Stanley.]

10.12 p.m.

The President of the Board of Trade (Mr. Oliver Stanley): I do not think it is necessary for me to take up more than a short time in making plain the general effect of these proposals. Hon. Members will, of course, realise that this Motion is only the first stage, and that, if it is passed, upon it will have to be introduced a new Clause which will contain the full details. A statement on those details will be made more appropriately at that point. However, I think I can, quite broadly, make plain the general effect of this Motion. I do not think I need recall to hon. Gentlemen the long and chequered history of what are known as the McKenna Duties. They were imposed by a former Chancellor of the Exchequer, Mr. McKenna, during the War, and their purpose at that time was supposed to be to prevent the tonnage urgently required for war purposes being used for what were largely luxury imports. The classes of goods affected were motor cars, musical instruments, clocks, films, and accessories or parts of those categories.
Afterwards, during the first Chancellorship of Lord Snowden, the McKenna Duties were removed only to be reimposed by the right hon. Gentleman the Member for Epping (Mr. Churchill) under the euphonious title of revenue duties. As revenue duties they existed down to the time when, in 1932, the first definite step was taken towards introducing a protective tariff in this country. When the Import Duties Act was introduced in 1932, it had the effect of placing upon all goods, with certain exceptions, a general ad valorem duty of 10 per cent. and, secondly, of allowing the industries concerned to make application to the Import

Duties Advisory Committee for an addition to that ad valorem duty. When that Act was passed, these McKenna Duties were omitted from its operation. The effect of this Resolution, if passed, and of the Clause which will be founded upon it, will be to bring that part of our protective system which is now filled by the McKenna Duties into line with the rest of the protective system, and to give to the industries which deal in these commodities the same right that is enjoyed by all other industries in the country of making application to the Import Duties Advisory Committee, the Import Duties Advisory Committee submitting a report to the Government, and the Government, if necessary, submitting an Order to the House.
It is difficult to think of any convincing argument against such a course. It is now a pure anachronism that these four types of commodities, for a purely historical reason, should be placed on a different footing from other commodities of a very similar character. There is no reason why motor car manufacturers should not be able to apply for an increased duty equally with iron and steel or engineering manufacturers. One can quite see the reason for the exclusion of the McKenna Duties from the Act of 1932. At that time the whole device of the Import Duties Advisory Committee, and the whole machinery of protective duties, was a new, untried and intricate piece of machinery, and where a number of industries were already enjoying, under the existing practice, a protective duty, one can understand why at that time they were left aside on the ground that they had already been dealt with. But that no longer applies, and for some time consideration has been given to the question of assimilating the two procedures, the McKenna Duty procedure, where a duty can only be varied by legislation, and the Import Duties Act procedure, where it can be varied, after investigation by the Import Duties Advisory Committee, by the passage of an Order through the House of Commons.
It is true that until recently this distinction has been rather of an academic character. There has been no real dissatisfaction in any quarter with the general height of these duties, nor any suggestion that, if the alteration were made, there would in fact be any application to the Import Duties Advisory Com-


mittee. But one cannot close ones eyes to the fact that during the last few months this question, which was an academic question, has become one of considerable public importance. Frankly, there has been a great deal of criticism by way of questions in the House, and a great deal of comment in the Press, as to the increased importation of one in particular of the commodities covered by the McKenna Duties. I am not now going to argue the merits, but there is no doubt that there is a question to be resolved. Whether that industry or any others, under this proposal to give them power to go to the Import Duties Advisory Committee, would be able to convince the Committee that there was a case for an increased duty, is clearly beside the point. What my right hon. Friend feels is that the time has come when, if it is thought that there is a question to be determined, these industries should be given the same opportunity of having it determined as is enjoyed by all the other industries of the country.
Perhaps I might quite shortly explain the actual provisions of the Resolution. Hon. Members will see that it has four Sub-sections. The effect of the first Subsection is to do away entirely with the original Section of the Finance Act of 1925 which re-created these McKenna Duties, and a number of small amendments to that Section which have been made in subsequent Finance Acts in reference to this subject. That alteration will, for a reason which I will explain later, come into force on 10th August of this year. The general effect of the second Sub-section is that, since the duties under the old McKenna procedure are being swept away, duties of exactly the same level will be re-imposed by Treasury Order. There will be, therefore, no immediate practical effect, no immediate change of the incidence of duty. The only result will be, as I explained, to enable these industries to operate under the Import Duties Act, 1932. Sub-section (3) deals with a very small point. Unless some provision such as that was made, under Section 19 of the Import Duties Act, when the Treasury came to lay this Order, to which I have already referred, re-imposing these duties on the same level, it could be done only after an affirmative Resolution of the House. As the House will already have discussed it, both on this occasion and

during the passage of the Clause, and as the form of the Order which the Treasury has to lay will have been prescribed in the Clause, we feel it will be a waste of Parliamentary time to demand that there should be an affirmative Resolution.
Sub-section (4) is a little complicated, because it deals with Imperial Preference. The history of Imperial Preference is as follows: Originally it was laid down that the duty on goods coming in from the Empire should be charged at two-thirds of the rate of the full McKenna Duties. In 1926, I think it was the preferential difference in favour of the Dominions was stabilised for a period of 10 years, which has been since extended by subsequent provision, and will expire on 19th August this year. As a matter of fact, during the period considerable alterations have been made in the McKenna Duties. In many instances they are now below the original 33⅓ per cent., but, under this guarantee, over the 10 years the Dominions were still entitled to a preference based on one-third of the 33⅓ per cent.—a preference, therefore, which, in some cases, when the duty was reduced became of a higher ratio than that of one-third.
When this guarantee expires, automatically the preferences to the Dominions will all go back to this level of one-third of the old rate. It is proposed, under Sub-section (4) of this Resolution, to lay that down, so that in future the rate charged upon Empire imports will be normally two-thirds of the rate charged on imports from abroad. That, I hope, makes clear the objects and the actual provisions of this Resolution, and I hope the Committee will be prepared to allow the Resolution to pass, in order that on it we may found a new Clause for inclusion in this Finance Bill.

10.26 p.m.

Mr. Pethick-Lawrence: The Resolution which is before the Committee, as the President of the Board of Trade has explained, does not of itself make any difference in the import duties in the way of their being imposed on these specific articles. The proposition is a change of procedure. Whereas the duties have been of a certain order under a certain method of procedure, the proposal of the Government is that in future they shall come under a different Act and be liable to change by a different method from what is the case at the present time. We on these benches have on many previous


occasions explained our opposition to the method of the Import Duties Advisory Committee. We have taken exception to it on the ground that the House was deprived of an opportunity of adequate debate, and that the duties were imposed n advance of the decision of the House, and further, that, in many cases, the House was not supplied with any information which was at all adequate to enable it to make up its mind on the matters brought under review. I cannot feel that the situation in this respect has changed to-day from what it was when this procedure was originally proposed by the Government in the early days of the previous Parliament.
We recognise, however, that the procedure the Government adopt with regard to the great mass of the articles which it is sought to protect is one which is, in fact, being invoked, and I do not know that there is any special ground for singling out individual articles for differential treatment. Moreover, there are very special reasons why this procedure is being proposed at the present time. The President of the Board of Trade made some reference to the matter, and it is in the common knowledge of the Committee that the real question is the importation n large numbers of a certain class of motor car to the detriment of the trade in this country. This large importation is being made possible at the present time by a peculiar form of financial assistance. I deliberately refrain from using the word "subsidy," but there is no doubt that considerable financial assistance is being given to enable these cars to compete in our market. What the precise character of that financial assistance is, it will be for someone to unravel and discuss. On the doctrines of pure Free Trade it has always been recognised that where an article enters into competition and is enabled to succeed in that competition by a definite subsidy given to it by the exporting country, the doctrines of pure Free Trade do not necessarily deter the importing country from placing the duty in those individual cases. Therefore, the proposed duty is in accordance with full Free Trade principles. This is a special case, and we on these benches recognise that if we were to oppose the proposal of the Government we should not be merely voting indirectly against a duty on these cars, but we should be

voting for postponing the question and not enabling it to be discussed at an early date. In these circumstances, having taken all the matters into consideration, we have decided not to oppose the Government's proposal.

10.32 p.m.

Sir Percy Harris: I am surprised at the speech of my right hon. Friend. The very last thing that I wish to do is to generate heat, but I am surprised at the position put before the Committee. The proposition is moved not by the Chancellor of the Exchequer, who is responsible for the change in the method of taxation, but the President of the Board of Trade. I am particularly surprised at my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) for not taking exception to the changeover in procedure. The old duty dates back to 1915. It has, therefore, been in existence 22 years. If there is an urgent problem—the questions that have been asked suggest that it is an urgent problem—the right and proper thing for the Chancellor of the Exchequer to do is to come here with a new Clause in the Finance Bill and to impose an additional duty. If this matter is so urgent that people are being ruined, then let the right hon. Gentleman follow the procedure of the Finance Bill on an ordinary Budget Resolution, rather than the procedure of the Import Duties Act. If there is an inquiry necessary, the right hon. Gentleman is capable of finding a gentleman capable of doing it, or even of referring this matter—

Mr. Charles Brown: If the Chancellor of the Exchequer adopted the policy suggested by the hon. Baronet, could we have a guarantee that we should have his support and that of his party for the proposition?

Sir P. Harris: Certainly not, but I want to have a Clause that we can examine. We do not want merely to have to record the decrees of the Treasury, late at night, or in the early hours of the morning, without any power to amend the proposal. That proposition has been put forward in the last five or six years from the Front Bench opposite. What has converted them I do not know; it may be the new dispensation, or perhaps the new co-operation. All that happens is that we have an Import Duties


Order presented to us late at night, although I give credit to the Parliamentary Secretary to the Treasury who has done his best to meet us in that respect by bringing forward this Resolution before 11 o'clock, but certainly at a comparatively late hour, all we can do is meekly to confirm or reject. If there is to be a change in the scale of duties, the right procedure is to go through the procedure of the Finance Bill, so that we can alter or amend the Clause as we think fit.
These particular duties date back for 22 years. This is no struggling infant industry coming into being and calling especially for immediate attention in order to save its existence, nor is it one of the poorest industries. I can understand a strong case for special treatment for the textile or cotton industry which has had to face great difficulties during the last half dozen years, but this is the wealthiest industry in the country. It has had the advantage, except for two years when the Labour party dropped the duty, of this protection for 22 years. It has not only had the advantage of the 33⅓ per cent. duty, but it has had the artificial protection which is given by the horse-power tax, originally framed to keep out American cars which were of high horse power and which gave English motor manufacturers special advantages in the British market. There have been immense profits made out of the industry during the last 10 years. The Morris Company, the Austin Company and the Rolls Company have immense reserves which they may well utilise to assist the industry to meet this new competition.
I say that if it can be proved that there is dumping—and curiously enough the Board of Trade was rather inclined to resist that suggestion at Question Time—or a conspiracy by a foreign government to ruin an industry, as far as I am concerned I should take no exception to special treatment or a special duty to meet the occasion. But if the Government are convinced that it is necessary to change the scale of duty let them follow the order of procedure of the Finance Act, bring in a new Clause which we can examine on its merits and amend as we think fit. This unsatisfactory and autocratic procedure of import orders is thoroughly undesirable, and ought to be opposed on every possible occasion. I say that the motor industry, which has enjoyed protection now for

close on 20 years, which has had exceptional advantages, and which is a wealthy industry having large reserves, certainly should not be given this special privilege of being taken out of the Finance Bill and dealt with under the Import Duties Orders procedure. I think that the Committee which, after all, is the guardian of the public purse, should be jealous of handing over to a committee of three the ancient privilege of imposing taxation, which has been won after years of labour. This is one more case of a new method of taxation which is most undesirable, and to which I object.

10.41 p.m.

Mr. H. G. Williams: I know that I speak on behalf of a large number of hon. Members on this side when I tender thanks to the Chancellor of the Exchequer and the President of the Board of Trade for having proposed this procedure which, after all, does not finally commit the Committee or the Government to any subsequent action. It is merely by the chance of the method adopted in 1932 that the protective duties commonly known as the McKenna Duties, after the well known Liberal Chancellor of the Exchequer of that name, were not brought within the purview of the Import Duties Advisory Committee, which was set up to stop that system of logrolling which everybody recognises has sometimes been an undesirable feature of protective tariffs abroad. That system was devised very largely to meet the kind of objection which was from time to time made by the hon. Baronet the Member for South West Bethnal Green (Sir P. Harris). To-night, we all rejoice that at last Bethnal Green, I will not say has crossed the Rubicon, but put a foot tentatively in the Rubicon.
I wish to thank the Chancellor of the Exchequer. I think this is a method which should be satisfactory to everybody. I should like also to pay a tribute to one or two Members of the Opposition. The hon. Member for Stoke (Mr. Ellis Smith) was, I think, the first hon. Member to draw attention to the recent events. He was supported by the hon. Member for Llanelly (Mr. J. Griffiths), and in a recent Debate, speaking from the Front Bench opposite, the hon. Member for Gower (Mr. Grenfell) pleaded in terms that were clear and unmistakable that what was happening should be stopped


or that steps should be taken so that we could stop it. On this occasion, I think the great majority of hon. Members agree that we are facing a situation of a very undesirable character, and that His Majesty's Government should not be unarmed in dealing with this sort of menace. There is one question I wish to put to the President of the Board of Trade. It is a little difficult to understand the significance of all the words in the Resolution, but in the first paragraph there is a reference to
any other enactment which amends or expressly relates to that section"—
that is to say, the section of the Finance Act, 1925. Does that reference cover motor tyres? Hon. Members may have forgotten that under the original McKenna Duties, when a car came into this country, the whole car was dutiable, and motor car parts were dutiable, except the tyres. For reasons which I understand had a significance during the Great War, the tyres were expressly exempted, not on economic but on political grounds. In 1928, the right hon. Gentleman the Member for Epping (Mr. Churchill1), who was then Chancellor of the Exchequer, decided to round off the duties by making the tyres a part of the motor car for the purpose of the McKenna Duties. I should like to ask the President of the Board of Trade whether this scheme will cover motor tyres separately, as well as every other part of a motor car.

10.44 p.m.

Captain W. T. Shaw: I wish to congratulate my right hon. Friend the President of the Board of Trade on the action which he has taken for the purpose of dealing with these Opel cars. The difficulty which has arisen in this matter is recent, but in my constituency there is a hardship which is far greater and which has more severely disturbed the people in that district than imports of Opel cars from Germany. I refer to the jute industry. I hope that the Government will take steps to find some way of dealing with that difficulty, so that the jute industry will get some reasonable protection.

10.45 p.m.

Mr. Acland: The party above the Gangway has surprised me twice to-day. This afternoon they did not not oppose the guaranteeing of a large sum of public money to a private monopoly, and now

they have just told the Committee that here we have something which they hate, and which they have always hated, and yet, when the Government ask for more of it, they do not oppose it. I am particularly sorry because I had special reasons for hoping that the increased duty on motor cars—and that is really what we are considering—would have been brought forward in a different form from those Orders which are usually presented to us after 11 o'clock. I had hoped to move an Amendment to the proposed duty on cars which would have been, I believe, useful as a matter of principle, namely, an Amendment designed to associate some system of genuine public accounting with any industry which claimed the privilege of the duty. That seems a vitally important principle. Since I have been in this House there has never been an Import Duties Order presented to us in a form which enabled an Amendment of that kind to be moved, or which allowed us to attach any conditions as to wages, costings and conditions of labour in the industry, or to make any change at all in the form of the Order. When we began to hear this talk about Opel cars coming in I thought that a proposal for a duty would arise which would give an opportunity of moving such an Amendment and discussing the principle of attaching such conditions to industries which obtained the privileges of a duty.
I think there is reason to wonder—I will not use the word "suspect"—whether this great motor industry of ours could not make a rather better show as regards its costs if it were really put to it. Very large sums have been given out by the motor industry, but perhaps not quite so large as the public outside has been led to believe, because I understand that every time £2,000,000 is given to some university or other, spread as it always is over seven years, so as to avoid Income Tax and Super-tax, the donor parts with £625,000 of his money, and by parting with that he is able to compel the Chancellor of the Exchequer to part with £1,375,000 of our money. In other words, these people who have been selling these cars and making very large profits are able, at their own sweet will, provided they put up £600,000 of their own money, to direct—at this time when every penny is required for armaments—very large sums of public money into


whatever directions they may choose. I believe that in this way the owner of one of our large motor manufacturing industries has directed to objectives which seem good to him sums of money which amounted to the total of the increase in the Tea Duty. I had hoped that when the question of increasing the preferences and tariffs and other privileges of this industry came up we would have been able to discuss and thrash out a proposal for attaching conditions as to costings, and so forth, to those privileges. Of course the Government would have outvoted us, but I had hoped that there would have been an opportunity of raising these matters. Now the Government have come along with this proposal. I do not know whether they read my thoughts, and wanted to avoid any trouble of that sort, but our chance has now been cut away; the party above the Gangway apparently is going to let us down and we shall walk into the Lobby alone against this proposal.

10.50 p.m.

Mr. E. Smith: The hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) and the hon. Member for Barnstaple (Mr. Acland) have chided our party for the attitude we have taken up. On this issue we are concerned about the people whom we represent and the working classes in general, and we are not letting them down. Many of my hon. Friends will be disturbed because the hon. Member for South Croydon (Mr. H. G. Williams) finds himself in agreement with us. I want to state the position as it affects us. We are living in a capitalist democratic State and we who are relatively young have the privilege of speaking here on behalf of the working class because of the sacrifices made by our ancestors during the past 100 years. Great struggles have taken place and great sacrifices have been made by those to whom we belong for the right of free speech, to establish the principle of collective bargaining and of the right to speak in this House and to build up our party. Owing to the development of monopoly capitalism in certain parts of Europe, and to the fact that they have forged a new political instrument, they are now resorting to practices which have for their object the undermining of established practices in this country. We see staring us in the face a menace to all that

we stand for, and to the social services which have been wrung from the Tory party. We look upon this new form of political activity on the Continent as a menace to our lives. Therefore, we are forced to take up this attitude.
May I remind hon. Members of the position in this country? It is true that the motor industry has been making exorbitant profits, and even within the framework of capitalist democracy we claim that a bigger proportion of those profits should have found their way into the pockets of the employés. Therefore, we say that, if it is right for us on this occasion to take a stand against the menace that is growing on the Continent, we are also right in making a stand for a bigger proportion of the profits of the trades that are receiving protection to come to the workpeople. Because we are acquiescing in this proposal it must not be taken that we are acquiescing in a wholesale policy of Protection. We see the menace in Europe, and what we are hoping is that this House will adopt a more scientific method of dealing with these matters.

10.55 p.m.

Mr. Stanley: I rise to answer briefly some of the points that have been made in the Debate. In reply to my hon. Friend the Member for East Croydon—[HON. MEMBERS: "South Croydon!"]—I mean South Croydon; I can never orientate him correctly—I would say that motor tyres were included by a subsequent Act in the category of McKenna Duties, and they will be included in the new Clause.

Mr. H. G. Williams: Thank you.

Mr. Stanley: I do not want to interfere in the private fight that has been going on between the United Front on the Opposition. I only want to say to the hon. Member for South-West Bethnal Green (Sir P. Harris) that although he has announced that he was surprised at the speech of the right hon. Gentleman opposite, I was not in the least surprised at the speech that he made. It was exactly what I had expected to hear. To the hon. Member for Barnstaple (Mr. Acland), I feel that my right hon. Friend and I rather owe an apology. I confess that we never realised, when we decided on this procedure, that one of its effects would be to deprive him of the opportunity of making


a speech, but the part of it which we have heard this evening has been of very great interest, and now that we know that that would be one of the consequences, when we weigh that against the possible effects on these big industries of giving them the opportunity of presenting their case, we still feel that the advantages of the policy that we have advocated must outweigh the disadvantages to which the hon. Member has drawn our attention, and we must still, therefore, ask the Committee to agree to our proposal.

10.57 p.m.

Mr. Bellenger: rose—

Hon. Members: Divide!

Mr. Bellenger: The right hon. Gentleman had far better have left unsaid what he has just said, and then it might have been possible for some of us to have kept silent. May I say to him and to other hon. Members that I for one am not at all satisfied with the method that the Government are taking in order to combat the menace which my hon. Friend the Member for Stoke (Mr. Ellis Smith) has explained? I am a Free Trader, or at any rate a freer trader, and I am not in favour of indiscriminate tariffs. I realise the special circumstances of this case, and I realise that if methods are to be adopted by foreign Governments such as are being adopted by Germany, we must take special measures to combat them, but I give the right hon. Gentleman warning that he must not expect that this party, or some of us, will support him in every action that he takes such as he is taking to-night.
There is another side to this question, which my hon. Friend the Member for Stoke has touched upon, as well as the hon. Member for Barnstaple (Mr. Acland), with whom I am in very great sympathy on the point that he has put as to the conditions in these industries that we are protecting. I believe the time will come when the Import Duties Act will itself have to be revised, and very considerably revised, so that we shall not only get a greater measure of protection for the manufacturers and the employers engaged in these different industries, but so that we shall also get more fairness for the

workers who are engaged in them. May I state my position if it comes to a Division to-night? I shall not support the Government, although many of my hon. Friends may do so. There have been occasions when I have not voted against the Government, for my own reasons, because I have thought that, although I could not support them, I could not vote against them, but to-night, although I realise that they are taking a cumbrous method of combating a very insidious form of competition directed from a totalitarian State, nevertheless I cannot support them in the Division Lobby to-night.

11.0 p.m.

Mr. Ede: I desire to associate myself with my hon. Friend the Member for Bassetlaw (Mr. Bellenger). It was a great pity that the right hon. Gentleman the President of the Board of Trade, in answering the hon. Member for Barnstaple (Mr. Acland), should have made it so emphatically clear that we could not avoid seeing that this procedure is adopted so as to avoid discussion on the great vital interests of industry which we regard as fundamental to any consideration of this problem. This is an industry which has to meet a peculiar and novel form of competition from abroad. There are grave doubts, which the right hon. Gentleman himself has voiced from that Box at Question Time and in part of his first speech this evening, as to the exact way in which this dumping is assisted in Germany. It is, therefore, very desirable that this House, in considering the problem, should have as free a hand as possible in dealing with it and in discussing it in a constructive manner. It is clear from the right hon. Gentleman's speech that he is delighted to have achieved the method whereby this can go through on the take-it-or-leave-it method which is associated with the Import Duties Advisory Committee's recommendations. Because of his attitude on this matter I also find myself unable to support the Government.

Question put.

The Committee divided: Ayes, 274; Noes, 16.

Division No. 245.]
AYES.
[11.3 p.m.


Agnew, Lieut.-Comdr. P. G.
Allen, Lt.-Col. Sir W. J. (Armagh)
Astor, Han. W. W. (Fulham, E.)


Albery, Sir Irving
Anstruther-Gray, W. J.
Attlee, Rt. Hon. C. R.


Allen, Col. J. Sandeman (B'knhead)
Asks, Sir R. W.
Baldwin-Webb, Col. J.




Banfield, J. W.
Grant-Ferris, R.
Petherick, M.


Barr, J.
Greenwood, Rt. Hon. A.
Pethick-Lawrence, Rt. Hon. F. W.


Batey, J.
Grenfell, D. R.
Pickthorn, K. W. M.


Beamish, Rear-Admiral T. P H.
Gridley, Sir A. B.
Plugge, Capt. L. F.


Beaumont, Hon. R. E. B. (Porism'h)
Griffiths, J. (Llanolly)
Ponsonby, Col. C. E.


Beechman, N. A.
Grimston, R. V.
Pownall, Lt.-Col. Sir Assheton


Bernays, R. H.
Groves, T. E.
Price, M. P.


Birchall, Sir J. D.
Guest, Lieut.-Colonel H. (Drake)
Procter, Major H. A.


Bird, Sir R. B.
Guest, Dr. L. H. (Islington, N.)
Radford, E. A.


Blair, Sir R.
Hall, G. H. (Aberdare)
Raikes, H. V. A. M.


Boulton, W. W.
Hambro, A. V.
Ramsay, Captain A. H. M.


Bower, Comdr. R. T.
Hannah, I. C.
Rankin, Sir R.


Boyee, H. Leslie
Harbord, A.
Rathbone, J. R. (Bodmin)


Briscoe, Capt. R. G.
Haslam, Henry (Horncastle)
Rayner, Major R. H.


Broad, F. A.
Haslam, Sir J. (Bolton)
Reed, A. C. (Exeter)


Bromfield, W.
Hayday, A.
Reid, Sir D. D. (Down)


Brown, C. (Mansfield)
Heilgers, Captain F. F. A.
Reid, W. Allan (Derby)


Brown, Col. D. C. (Hexham)
Hely-Hutchinson, M. R.
Ramer, J. R.


Brown, Brig.-Gen. H. C. (Newbury)
Henderson, J. (Ardwick)
Rickards, G. W. (Skipton)


Browne, A. C. (Belfast, W.)
Heneage, Lieut.-Colonel A. P.
Ridley, G.


Buchanan, G.
Hepburn, P. G. T. Buchan.
Ritson, J.


Bull, B. B.
Herbert, Major J. A. (Monmouth)
Roberts, Rt. Hon. F. O. (W. Brom.)


Burke, W. A.
Hicks, E. G.
Robinson, J. R. (Blackpool)


Campbell, Sir E. T.
Higgs, W. F.
Robinson, W. A. (St. Helens)


Carver, Major W. H.
Holmes, J. S.
Ropner, Colonel L.


Cary, R. A.
Hopkinson, A.
Ross, Major Sir R. D. (Londonderry)


Cassells, T.
Horsbrugh, Florence
Ross Taylor, W. (Woodbridge)


cazalet, Thelma (Islington, E.)
Hudson, Capt. A. U. M. (Hack., N.)
Rowlands, G.


Chapman, A. (Rutherglen)
Hunloke, H. P.
Royds, Admiral Sir P. M. R.


Christie, J. A.
Hunter, T.
Ruggles-Brise, Colonel Sir E. A.


Clarke, Colonel R. S. (E. Grinstead)
Hutchinson, G. C.
Russell, Sir Alexander


Clarry, Sir Reginald
Inskip, Rt. Hon. Sir T. W. H.
Russell, S. H. M. (Darwen)


Cluse, W. S.
Jagger, J.
Salmon, Sir I.


Cobb, Captain E. C. (Preston.)
Jenkins, A. (Pontypool)
Salt, E. W.


Colville, Rt. Hon. John
Joel, D. J. B.
Samuel, M. R. A.


Conant, Captain R. J. E.
John, W.
Sanderson, Sir F. B.


Cooke, J. D. (Hammersmith, S.)
Jones, Sir G. W. H. (S'k N'w'gen)
Sandys, E. D.


Cooper, Rt. Hn. T. M. (E'nburgh, W.)
Jones, L. (Swansea W.)
Scott, Lord William


Courthope, Col. Rt. Hon. Sir G. L.
Jones, Morgan (Caerphilly)
Selley, H. R.


Craven-Ellis, W.
Kirby, B. V.
Shakespeare, G. H.


Croft, Brig.-Gen. Sir H. Page
Lamb, Sir J Q.
Shaw, Captain W. T. (Forfar)


Crooke, Sir J. S.
Latham, Sir P.
Shepperson, Sir E. W.


Crookshank, Capt. H. F. C.
Law, R. K. (Hull, S.W.)
Shute, Colonel Sir J. J.


Groom-Johnson, R. P.
Lee, F.
Silverman, S. S.


Cross, R. H.
Leech, Sir J. W.
Simon, Rt. Hon. Sir J. A


Cruddas, Col. B.
Lees-Jones, J.
Simpson, F. B.


Culverwell, C. T.
Leighton, Major B. E. P.
Smiles, Lieut.-Colonel Sir W. D.


Daggar, G.
Lennox-Boyd, A. T. L.
Smith, E. (Stoke)


Dalton, H.
Lindsay, K. M.
Smith, Sir Louis (Hallam)


Davies, Major Sir G. F. (Yeovil)
Lipson, D. L.
Smith, Sir R. W. (Aberdeen)


Davies, S. O. (Merthyr)
Little, Sir E. Graham-
Smith, T. (Normanton)


Denville, Alfred
Llewellin, Lieut.-Col. J. J.
Somervell, Rt. Hon. Sir Donald


Despencer-Robertson, Major J. A. F
Locker-Lampson, Comdr. O. S.
Sorensen, R. W.


Dobbie, W.
Loftus, P. C.
Spears, Brigadier-General E. L.


Doland, G. F.
Lyons, A. M.
Spens, W. P.


Dorman-Smith, Major Sir R. H.
Mabane, W. (Huddersfield)
Stanley, Rt. Hon. Oliver (W'm'ld)


Drewe, C.
M'Connell, Sir J.
Stephen, C.


Duckworth, Arthur (Shrewsbury)
McCorquodale, M. S.
Stourton, Major Hon. J. J.


Dugdale, Captain T. L.
Macdonald, Capt. P. (Isle of Wight)
Stuart, Hon. J. (Moray and Nairn)


Duncan, J. A. L.
McEntee, V. La T.
Sueter, Rear-Admiral Sir M. F.


Eastwood, J. F.
McGovern, J.
Tasker, Sir R. I.


Eckersley, P. T.
Maonamara, Capt. J. R. J.
Taylor, C. S. (Eastbourne)


Edmondson, Major Sir J.
Maitland, A.
Taylor, Vice-Adm. E. A. (Padd., S.)


Edwards, Sir C. (Bedwellty)
Margesson, Capt. Rt. Hon. H. D. R.
Thomas, J. P. L.


Elliot, Rt. Hon. W. E.
Markham, S. F.
Thomson, Sir J. D. W.


Ellis, Sir G.
Mothers, G.
Tinker, J. J.


Elliston, Capt. G. S.
Maxton, J.
Tufnell, Lieut.-Commander R. L.


Emery, J. F.
Maxwell, Hon. S. A.
Turton, R. H.


Emmott, C. E. G. C.
Mayhew, Lt.-Col. J.
Viant, S. P.


Emrys-Evans, P. V.
Metter, Sir R. J. (Mitcham)
Wakefield, W. W.


Entwistle, Sir C. F.
Mellor, Sir J. S. P. (Tamworth)
Walkden, A. G.


Errington, E.
Mills, Major J. D. (New Forest)
Walker-Smith, Sir J.


Erskine-Hill, A. G.
Morrison, Rt. Hon. H. (Hackney, S.)
Wallace, Capt. Rt. Hon. Euan


Fleming, E. L.
Morrison, Rt. Hon. W. S. (Cirencester)
Ward, Lieut.-Col. Sir A. L. (Hull)


Frankel, D.
Munro, P.
Ward, Irene M. B. (Wallsend)


Fremantle, Sir F. E.
Nall, Sir J.
Warrender, Sir V.


Furness, S. N.
Neven-Spence, Major B. H. H.
Waterhouse, Captain C.


Fyfe, D. P. M.
O'Connor, Sir Terence J.
Watkins, F. C.


Gardner, B. W.
Oliver, G. H.
Watson, W. McL.


Gibson, Sir C. G. (Pudsey and Otley)
O'Neill, Rt. Hon. Sir Hugh
Watt, Major G. S. Harvie


Gibson, R. (Greenock)
Parker, J.
Wayland, Sir W. A.


Gledhill, G.
Parkinson, J. A.
Wedderburn, H. J. S.


Gluokstein, L. H.
Patrick, C. M.
Wells, Sir Sydney


Goldie, N. B.
Peaks, O.
Whiteley, Major J. P. (Buckingham)


Gower, Sir R. V.
Perkins, W. R. D.
Wickham, Lt.-Col. E. T. R.







Williams, E. J. (Ogmore)
Womersley, Sir W. J.



Williams, H. G. (Croydon, S.)
Wragg, H.
TELLERS FOR THE AYES.—


Windsor-Clive, Lieut.-Colonel G.
Wright, Wing-Commander J. A.C.
Captain Hope and Lieut.-Colonel


Winterton, Rt. Hon. Earl
Young, A. S. L. (Partick)
Kerr.


Wise, A. R.
Young, Sir R. (Newton)





NOES>


Acland, R. T. D. (Barnstaple)
Jones, Sir H. Haydn (Merioneth)
Sinclair, Rt. Hon. Sir A. (C'thn's)


Evans, D. O. (Cardigan)
Leach, W.
White, H. Graham


Foot, D.M.
Owen, Major G.



George, Major G. Lloyd (Pembroke)
Roberts, W. (Cumberland, N.)
TELLERS FOR THE NOES.—


George, Megan Lloyd (Anglesey)
Rothschild, J.A.de
Sir Hugh Seely and Sir Percy


Griffith, F. Kingsley (M'ddl'sbre, W.)
Salter, Dr. A. (Bermondsey)
Harris.


Harvey, T.E. (Eng. Univ's.)
Silkin, L.



Question put, and agreed to.

Resolution to be reported To-morrow; Committee to sit again To-morrow.

Orders of the Day — HOUSING (RURAL WORKERS) AMENDMENT BILL.

Order for Consideration of Lords Amendment read.

Motion made, and Question, "That the Lords Amendment be now considered," put, and agreed to.—[Captain Margesson.]

Lords Amendment considered accordingly.

Lords Amendment: In page 7, line 12, insert new Clause (Additional provisions with respect to loans by local authorities.)

(1) Where in pursuance of Section two of the principal Act a local authority give assistance by way of loan to the owner of a dwelling, then, subject to the provisions of this Section and to such conditions as may be approved by the Department the loan may, in lieu of being secured by a bond and disposition in security or other deed of security, be secured by an order (in this section referred to as a "charging order") made by the local authority providing and declaring the dwelling, or the dwelling and such other subjects belonging to the owner of the dwelling as the local authority and such owner may agree, to be charged and burdened with an annuity to repay the amount of the loan.

(2) The annuity charged shall commence from the date of the order, and shall be a sum of such amount and shall be payable to the local authority or their assignees for such period of years, not exceeding twenty, as the local authority and the owner may agree.

(3) A local authority shall not make a charging order, and a charging order shall not be effectual, unless—

(a) the local authority have served on every person appearing in the Register of Sasines as the proprietor of, or as holding a heritable security over, the subjects or any part thereof to be charged and burdened with the said annuity, notice that if no objection is intimated to them in writing by such person within twenty-one days from the date of service of the notice, they intend to make such charging order; and

(b) no objection has been so intimated by any person on whom notice has been so served.

(4) The provisions of Section twenty-two of the Housing (Scotland) Act, 1925, shall apply to a charging order made under this section in like manner as they apply to a charging order made under Section twenty-one of the said Act, subject to the following and any other necessary modifications—
(a) Sub-section (2) shall apply as if after the words "advances of public money" there were inserted the words—
(d) any rent charge secured on the premises by absolute order made under and in terms of the Improvement of Land Act, 1864;
(e) any loan made for agricultural purposes in pursuance of the Agricultural Credits (Scotland) Act, 1929, by any company incorporated for the purposes of that Act, where such loan has been secured on the premises by a bond and disposition in security or other deed of security duly registered in the appropriate Register of Sasines; and
(f) any charge on the premises created under any provision in any Act authorising a charge for recovery of expenses incurred by a local authority under section one hundred and twenty-five of the Public Health (Scotland) Act, 1897, or by a local authority or an owner under section twenty of the Housing (Scotland) Act, 1925, or section fifteen of the Housing (Scotland) Act, 1930";
(b) Subsection (3) shall not apply.

(5) For the purpose of this section a notice may be served by delivering it to the person on whom it is required to be served or by sending it by registered letter to such person at his usual or last known address, or if such person cannot be found, to the Extractor of the Court of Session. An acknowledgment endorsed on such notice or a copy thereof, by such person, or where the notice is sent by registered letter, a certificate subscribed by the clerk to the local authority that such notice was duly posted and having the Post Office receipt for the registered letter attached shall be conclusive evidence that such notice was duly served on the date stated in the acknowledgment or Post Office receipt.

(6) In this section the expression "owner" has the like meaning as in section forty-nine of the Housing (Scotland) Act, 1930.

(7) This section shall extend to Scotland only.

11.13 p.m.

Colonel Sir George Courthope: I beg to move, as an Amendment to the Lords Amendment, in Sub-section (4) (a) (d) after "Improvement of Land Act, 1864," to add:
or the Lands Improvement Company's Acts, 1853 to 192o.
I understand that this manuscript Amendment to the Lords Amendment will be accepted by the Government, so that I need not take up more than a moment in explaining it. The proposed Lords Amendment is the result of a conference which was held a week or two ago in Edinburgh in order to arrange for the priority of loans which are authorised by the Bill and by the Housing (Agricultural Population) (Scotland) Bill. There was an agreement that certain classes of statutory loan should be protected and should retain their existing priority. The words in the Lords Amendment are intended to carry out that intention, but do not do so completely, and the Amendment which I move is proposed after consultation with my right hon. and learned Friend the Lord Advocate and is in order fully to implement an agreement about which there is no dispute or controversy.

11.15 p.m.

The Under-Secretary of State for Scotland (Mr. Wedderburn): This new Clause was inserted by the Government in another place. Representations in favour of the provisions which it contains were made to my right hon. Friend some time ago by local authorities in Scotland, supported by the Chamber of Agriculture and various other bodies, and, after some discussions at a conference on 26th May, which was attended by these bodies together with representatives of the Convention of Royal Burghs, the Lands Improvement Company, the Scottish Agricultural Securities Corporation, and a representative of the Writers to the Signet, the proposals in the new Clause were agreed upon. The general object of the Clause is to encourage local authorities to make more use of the power to give loans for the purposes of this Measure, and it does so by enabling authorities to make charging orders declaring the annuities to repay their loans to have prior ranking over other charges on the property. Before a local authority can make a charging order, they must give notice to all persons who have already

made loans over the property, and, if any of those persons object, the local authority are precluded from making the charging order; and they cannot in any case make an order to take precedence over certain specified charges, such as loans made by the Lands Improvement Company and the Scottish Agricultural Securities Corporation. The Amendment of my hon. and gallant Friend arises out of this last provision; it is a purely drafting Amendment, and we are prepared to accept it.

Orders of the Day — CHURCH OF ENGLAND ASSEMBLY (POWERS) ACT, 1919.

Order read for resuming Adjourned Debate on Question [21st June]—
That in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Parsonages Measure, 5938, be presented to His Majesty for Royal Assent."—[Sir F. Fremantle.]

Question again proposed.

11.18 p.m.

Sir Francis Fremantle: Last night I was asked a question on the subject of where provision is made for the consent of the parochial church council being obtained. The answer is that there is no change whatsoever in the position of the parochial church council. The position is set out in Clause 3.

Resolved,
That, in accordance with the Church of England Assembly (Powers) Act, 1919, this House do direct that the Parsonages Measure, 1938, be presented to His Majesty for Royal Assent.

Orders of the Day — CHIMNEY SWEEPERS ACTS (REPEAL) BILL.

Read the Third time, and passed.

The remaining Orders were read, and postponed.

Orders of the Day — ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Captain Margesson.]

Adjourned accordingly at Twenty-one Minutes after Eleven o' Clock.